Trade Analysis and Tips for Trading the Japanese Yen
The price test at 149.22 occurred when the MACD indicator had already moved significantly upward from the zero line, limiting the pair's upward potential at the end of the week. Shortly afterward, there was another test of 149.22, coinciding with the MACD being in the overbought zone. Since it was Friday and the pair was near the weekly high, expecting a rise in the dollar was unlikely. Therefore, executing Scenario #2 for selling was more relevant. As a result, the pair dropped by 25 points, and the movement ended there. The pair did not reach the target level. Today, buyers continue to increase long positions on the dollar, as the upward trend from last week remains intact. Interest in the dollar has only grown following the news of a slight inflation spike in the U.S. This development allows the Federal Reserve to act more cautiously. Regarding intraday strategy, I plan to focus more on implementing Scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy USD/JPY if the price reaches the area of 149.39 (green line on the chart) with a target of rising to the level of 149.98 (thicker green line on the chart). At the 149.98 level, I will close the long positions and open short positions in the opposite direction, aiming for a 30-35 point move from this level. A significant rise in the pair is unlikely today. Important: Before buying, ensure that the MACD indicator is above the zero line and has just started to rise from it.
Scenario #2: I also plan to buy USD/JPY today in the case of two consecutive tests of the 149.04 price, with the MACD indicator in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. A rise to the resistance levels of 149.39 and 149.98 can be expected.
Sell Signal
Scenario #1: I plan to sell USD/JPY today only after the price breaks below the 149.04 level (red line on the chart), which will likely lead to a quick decline in the pair. The key target for sellers will be the 147.95 level, where I will close the short positions and immediately open long positions in the opposite direction, aiming for a 20-25 point move from this level. Pressure on the pair will return if there is weak activity near the daily high. Important: Before selling, ensure that the MACD indicator is below the zero line and has just started to decline from it.
Scenario #2: I also plan to sell USD/JPY today in the case of two consecutive tests of the 149.39 price, with the MACD indicator in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decline to the resistance levels of 149.04 and 148.50 can be expected.
Chart Explanations:
- Thin green line: The entry price where you can buy the trading instrument;
- Thick green line: The suggested price where you can set Take Profit or manually secure profits, as further growth beyond this level is unlikely;
- Thin red line: The entry price where you can sell the trading instrument;
- Thick red line: The suggested price where you can set Take Profit or manually secure 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 Note:Beginner traders in the forex market should exercise great caution when deciding to enter the market. It's advisable to stay out of the market before the release of important fundamental reports to avoid being caught in sharp price fluctuations. If you choose to trade during news releases, always place stop-loss orders to minimize losses. Without placing stop-loss orders, you could quickly lose your entire deposit, especially if you trade large volumes without proper money management.
And remember, for successful trading, you need to have a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is typically a losing strategy for intraday traders.
