Trade Analysis and Tips for Trading the Japanese Yen
The price test at 139.90 occurred when the MACD indicator had just begun its downward movement from the zero mark, confirming a correct entry point to sell the dollar in continuation of the recent downward trend. However, as you can see on the chart, the downward movement never materialized, leading to a loss. Then, as the pair moved up, a price test at 140.30 took place, which coincided with the beginning of the MACD's upward movement from the zero mark, confirming the correct entry point for buying the dollar, resulting in a rise of more than 50 pips. Selling on the rebound from 140.87 allowed for an additional profit of around 25 pips. Today's strong service sector activity index for Japan, which exceeded economists' forecasts, helped the yen regain some positions against the US dollar. I will continue focusing on selling after upward corrections in continuation of the downward trend. As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and 2.
Buy Signal
Scenario No. 1: Today, I plan to buy USD/JPY when the entry point around 141.01 (green line on the chart) is reached, aiming for a rise to the 141.53 level (thicker green line on the chart). Around 141.53, I plan to exit the long positions and open shorts, expecting a movement of 30-35 pips in the opposite direction. The pair's growth today can be expected only as part of a correction. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning its upward movement.
Scenario No. 2: I also plan to buy USD/JPY today in the event of two consecutive tests of the 140.61 level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. You can expect a rise to the opposite levels of 141.01 and 141.53.
Sell Signal
Scenario No. 1: I plan to sell USD/JPY today only after testing the level of 140.61 (red line on the chart), leading to a rapid decline in the pair. The key target for sellers will be the 140.04 level, where I plan to exit short positions and immediately open longs, expecting a movement of 20-25 pips in the opposite direction. Pressure on the pair may return at any moment, as the bearish market for the dollar has not disappeared. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning its downward movement.
Scenario No. 2: I also plan to sell USD/JPY today if the price of 141.01 is tested twice consecutively when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. You can expect a decline to the opposite levels of 140.61 and 140.04.
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 secure profits, 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 set Take Profit or manually secure profits, 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 must be very cautious when deciding to enter the market. It is best to stay out of the market before important fundamental reports are released to avoid sharp price fluctuations. If you choose to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose 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.
