Analysis and Trading Tips for the Japanese Yen
The test of the 145.35 level occurred when the MACD indicator had risen significantly from the zero line, which limited the further upward potential of the pair. For this reason, I did not buy the dollar and missed the subsequent development of the USD/JPY correction. Since the pair's rise continued during today's Asian session, the correction might extend, especially given the lack of any significant statistics from Japan and the U.S. However, remember that we are in a major bearish trend, and any rise in the pair will be viewed as a potential entry zone for major sellers. In terms of intraday strategy, I will focus more on implementing Scenarios No. 1 and No. 2.
Buy Signal
Scenario No. 1: I plan to buy USD/JPY today if the price reaches around 146.35 (green line on the chart), with a target price of 146.92 (thicker green line on the chart). Around 146.92, I plan to exit the long positions and enter short positions (targeting a movement of 30-35 points from the level). An additional rise in the pair today is possible within the context of an upward correction. Important: Before buying, ensure that the MACD indicator is above the zero line and beginning its upward movement.
Scenario No. 2: I also plan to buy USD/JPY today if the price tests 146.04 twice. This should occur when the MACD indicator is in the oversold area. This could limit the pair's downward potential and lead to an upward market reversal. Expect growth to levels of 146.35 and 146.92.
Sell Signal
Scenario No. 1: I plan to sell USD/JPY today only after the price updates the 146.04 level (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 145.54 level, where I plan to exit the short positions and immediately enter long positions (targeting a movement of 20-25 points from the level). Downward pressure on the pair could return at any moment, as the bearish trend for the dollar persists. Important: Before selling, ensure that the MACD indicator is below the zero line and beginning its downward movement.
Scenario No. 2: I also plan to sell USD/JPY today if the price tests 146.35 twice when the MACD indicator is in the overbought area. This could limit the pair's upward potential and lead to a downward market reversal. Expect a decline to levels of 146.04 and 145.54.
Chart Details:
- Thin Green Line – Entry price for buying the trading instrument.
- Thick Green Line – Estimated price where to set Take Profit or lock in profits, as further growth above this level is unlikely.
- Thin Red Line – Entry price for selling the trading instrument.
- Thick Red Line – Estimated price where to set Take Profit or lock in profits, as further decline below this level is unlikely.
- MACD Indicator – When entering the market, it's important to consider overbought and oversold zones.
Important: For beginner forex traders, it is crucial to make market entry decisions with great caution. It is best to stay out of the market before important fundamental reports to avoid sharp fluctuations in the exchange rate. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade with large volumes.
Remember, successful trading requires a clear trading plan, such as the one presented above. Spontaneous trading decisions based on current market conditions are inherently a losing strategy for intraday traders.
