Trade Analysis and Advice for Trading the Japanese Yen
The price test at 142.98 occurred when the MACD indicator had just started moving downward from the zero mark, confirming the correct entry point for selling the dollar in line with the ongoing downtrend observed in recent months. As a result, the pair dropped by more than 60 pips. However, buying on the rebound at 142.38 did not yield the expected result. Yesterday, news of a weak report on Japan's monetary aggregate kept the pair within a horizontal channel temporarily, after which pressure on the dollar returned. Today's speech by Bank of Japan board member Junko Nakagawa led to another significant dollar sell-off, as more central bank officials have recently hinted at the possibility of further interest rate hikes in Japan. As for the intraday strategy, I will rely more on executing scenarios No. 1 and 2.
Buy Signal
Scenario No. 1: Today, I plan to buy USD/JPY upon reaching the entry point around 141.78 (green line on the chart), with a target of rising to the level of 143.03 (thicker green line on the chart). Around 143.03, I plan to exit long positions and open shorts in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from this level). Today's rise in the pair can only be expected within the correction framework. Important! Before buying, ensure the MACD indicator is above the zero line and is just starting its upward movement.
Scenario No. 2: I also plan to buy USD/JPY today in case of two price tests at 140.59 while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. We can expect a rise to the opposite levels of 141.78 and 143.03.
Sell Signal
Scenario No. 1: I plan to sell USD/JPY today only after testing the level of 140.59 (red line on the chart), leading to a rapid decline in the pair. The key target for sellers will be 139.33, where I plan to exit short positions and immediately open longs in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from this level). Pressure on the pair may return at any moment since the bearish trend for the dollar remains intact. Important! Before selling, make sure the MACD indicator is below the zero line and is just starting its downward movement.
Scenario No. 2: I also plan to sell USD/JPY today in case of two consecutive tests of the 141.78 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. We can expect a decline to the opposite levels of 140.59 and 139.33.
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.
