Trade Analysis and Tips for Trading the Japanese Yen
The price test of 144.74 occurred when the MACD indicator started to move upwards from the zero mark, confirming the correct entry point for buying the dollar. As a result, the pair rose to around the target level of 145.55, falling just a few pips short. However, this movement allowed traders to gain about 60 pips of profit. Today, a substantial amount of data from Japan has been released, which is difficult to describe as positive, yet it has not led to a new yen sell-off or strengthened the dollar. The Tokyo Consumer Price Index figures were higher than economists' forecasts, while the data on unemployment, industrial production, and retail sales were disappointing, falling short of predicted values. It is evident that the pair will continue to trade within a horizontal channel, with the main market driver being US data, which will be discussed in more detail in the forecast for the second half of the day. As for the intraday strategy, I will rely more on scenarios No. 1 and 2.
Buy Signal
Scenario No. 1: Today, I plan to buy USD/JPY when it reaches the entry point at 144.96, plotted by the green line on the chart, with the goal of rising to 145.43, plotted by the thicker green line on the chart. In the area of 145.43, I intend to exit long positions and open short positions in the opposite direction, expecting a movement of 30-35 pips in the opposite direction from the level. We can count on the pair to rise today within the framework of the upward correction. Important: Before buying, ensure the MACD indicator is above the zero mark and starting to rise from it.
Scenario No. 2: I also plan to buy USD/JPY today in case of two consecutive tests of 144.73 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reverse market upturn. We can expect growth to the opposite levels of 144.96 and 145.43.
Sell Signal
Scenario No. 1: I plan to sell USD/JPY today only after testing the level of 144.73 plotted by the red line on the chart, which will lead to a rapid decline in the pair. The key target for sellers will be the level of 144.28, where I intend to exit short positions and immediately open long positions in the opposite direction, expecting a movement of 20-25 pips in the opposite direction from that level. Pressure on USD/JPY may return at any moment, since the bearish market for the dollar has not gone away, which is confirmed by the complete disregard of today's data. Important: Before selling, ensure the MACD indicator is below the zero mark and starting to decline.
Scenario No. 2: I also plan to sell USD/JPY today in case of two consecutive tests of 144.96 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse market downturn. We can expect a decline to the opposite level of 144.73 and 144.28.
What's on the Chart:
Thin green line: the entry price at which you can buy the trading instrument.
Thick green line: the estimated price at which you can set Take Profit or manually close positions, as further growth above this level is unlikely.
Thin red line: the entry price at which you can sell the trading instrument.
Thick red line: an estimated price at which you can place Take Profit or manually close positions, as further decline below this level is unlikely.
MACD indicator: when entering the market, it is essential to be guided by overbought and oversold zones.
Important: Novice traders in the forex market need to be very careful when making decisions about entering the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You must set stop orders to avoid losing your entire deposit, especially if you don't use money management and trade in large volumes.
Remember, a clear trading plan, like the one I've outlined, is essential for successful trading. Making impulsive decisions based on the current market situation is a losing strategy for novice intraday traders.
