Analysis of Trades and Tips for Trading the Japanese Yen
The test of the 143.66 price level occurred when the MACD indicator was just beginning to move upward from the zero mark, confirming an optimal entry point for buying the dollar, anticipating a modest correction in the pair during the first half of the day after the large sell-off caused by statements from Bank of Japan representatives about the need for further interest rate hikes. Today, the second half of the day is highlighted by various U.S. labor market data. If ADP employment changes and initial jobless claims exceed economists' predictions, it will create an opportunity to buy the dollar and sell the yen. However, if, like yesterday, the data disappoints, you can continue trading with the downtrend, targeting a new weekly low. As for the intraday strategy, I plan to act based on Scenarios #1 and #2.
Buy Signal
Scenario #1: I plan to buy USD/JPY today if the price reaches the entry point around 143.78 (green line on the chart), targeting a rise to the level of 144.80 (the thicker green line on the chart). At 144.80, I will exit purchases and open sales in the opposite direction (expecting a reversal of 30-35 points in the opposite direction from the level). A rise in the pair today can be expected after strong U.S. data. Important: Before buying, ensure that the MACD indicator is above the zero mark and beginning its upward movement.
Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the price at 143.24, at a time when the MACD indicator is in the oversold area. This will limit the pair's downward potential and trigger an upward market reversal. The expected rise would be to the levels of 143.78 and 144.80.
Sell Signal
Scenario #1: I plan to sell USD/JPY today after the price breaks below 143.24 (red line on the chart), which is expected to result in a quick decline in the pair. The key target for sellers will be the 142.12 level, where I will exit sales and immediately open purchases in the opposite direction (expecting a reversal of 20-25 points in the opposite direction from the level). Selling pressure on the pair will likely return if U.S. economic data is weak. Important: Before selling, ensure that the MACD indicator is below the zero mark and just starting its downward movement.
Scenario #2: I also plan to sell USD/JPY today in the event of two consecutive tests of the price at 143.78, at a time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and could trigger a downward market reversal. The expected decline would be to the levels of 143.24 and 142.12.
Chart Analysis:
- Thin green line – the entry price where the trading instrument can be bought.
- Thick green line – the estimated price where you can place a Take Profit or close profits manually, as further growth above this level is unlikely.
- Thin red line – the entry price where the trading instrument can be sold.
- Thick red line – the estimated price where you can place a Take Profit or close profits manually, as further decline below this level is unlikely.
- MACD Indicator – when entering the market, it is important to pay attention to overbought and oversold areas.
Important: Beginner traders in the Forex market must make entry decisions cautiously. It is best to stay out of the market before major fundamental reports to avoid sharp fluctuations in the exchange rate. If you decide to trade during news releases, always set stop-loss orders to minimize losses. Without setting stop-losses, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
And remember, to trade successfully, you need a clear trading plan, like the one I presented above. Making impulsive trading decisions based on the current market situation is generally a losing strategy for an intraday trader.
