Analysis of Trades and Tips for Trading the Japanese Yen
The test of the 152.70 price level occurred when the MACD indicator had already risen significantly above the zero mark, which limited the pair's upward potential. For this reason, I refrained from buying the dollar.
The further movement depends on the U.S. Producer Price Index (PPI) data for November. These figures could significantly influence traders' plans and determine the Federal Reserve's next steps. Changes in producer prices are a key inflation indicator, often preceding changes in retail prices. If the numbers show growth, investors may lean toward a more cautious stance on interest rates for the upcoming year, affecting borrowing costs and economic activity. Conversely, if the data reveals moderate or declining producer prices, it could push the Fed toward a more accommodative monetary policy. In a low-inflation environment, businesses have more room to plan expenditures and investments, fostering economic stability.
Additionally, the weekly U.S. jobless claims data will also be released, though it is unlikely to have a significant impact on the currency market, particularly for the USD/JPY pair.
For intraday strategies, I will focus on Scenario #1 and Scenario #2.
Buy Signal
Scenario #1:Plan to buy USD/JPY today around 152.45 (green line on the chart) with a target at 152.99 (thicker green line on the chart). At 152.99, I plan to exit long positions and open shorts in the opposite direction (targeting a 30-35 point pullback). Expect the pair to rise only if U.S. inflation data shows growth.Important: Before buying, ensure that the MACD is above the zero mark and just starting to rise.
Scenario #2:I also plan to buy USD/JPY after two consecutive tests of the 152.13 level when the MACD is in the oversold zone. This will limit the pair's downward potential and trigger a market reversal upward. Anticipate growth to the opposite levels of 152.45 and 152.99.
Sell Signal
Scenario #1:Plan to sell USD/JPY after breaking below 152.13 (red line on the chart), leading to a quick decline in the pair. The key target for sellers will be 151.54, where I plan to exit short positions and open long positions in the opposite direction (targeting a 20-25 point upward correction). Dollar pressure may return if U.S. inflation data is weaker.Important: Before selling, ensure that the MACD is below the zero mark and just starting to decline.
Scenario #2:I also plan to sell USD/JPY after two consecutive tests of the 152.45 level when the MACD is in the overbought zone. This will limit the pair's upward potential and trigger a market reversal downward. Expect a decline to the opposite levels of 152.13 and 151.54.
Chart Notes
- Thin green line: Entry price for buying the instrument.
- Thick green line: Target price for setting Take Profit or manually locking in profits, as further growth above this level is unlikely.
- Thin red line: Entry price for selling the instrument.
- Thick red line: Target price for setting Take Profit or manually locking in profits, as further declines below this level are unlikely.
- MACD Indicator: Use overbought and oversold zones as a guide when entering the market.
Important Note
Beginner Forex traders must exercise caution when entering the market. Before major fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop-loss orders to minimize losses. Without stop-losses, you could quickly lose your entire deposit, especially when trading large volumes without proper money management.
Remember, successful trading requires a clear plan, like the one outlined above. Spontaneous decisions based on current market conditions are inherently a losing strategy for intraday traders.
