Trade Analysis and Tips for Trading the Japanese Yen
The price test of 156.20 occurred at a moment when the MACD indicator had already moved significantly upward from the zero mark, which limited the pair's upward potential. For this reason, I did not buy the dollar. The second test of 156.20 happened when the MACD was in the overbought area, which triggered the implementation of Scenario No. 2 for selling. However, the trade resulted in losses.
In the second half of the day, there are no important fundamental statistics from the US, so active trading in the USD/JPY pair is unlikely. Additionally, US markets will be closed due to Thanksgiving. This combination of factors indicates a likely decline in liquidity and reduced volatility in this currency pair. The lack of stimulating economic data from the United States deprives traders of catalysts for active trading. The closure of US exchanges for Thanksgiving further suppresses trading activity. This is especially relevant for USD/JPY, given that the US dollar is one of its components. Therefore, investors and traders should expect a calm session with limited movement in the USD/JPY pair.
As for the intraday strategy, I will rely more on the implementation of Scenarios No. 1 and No. 2.
Buy Signal
Scenario No. 1: Today, I plan to buy USD/JPY upon reaching the entry point around 156.45 (the green line on the chart), targeting an increase to the level of 156.77 (the thicker green line on the chart). Near 156.77, I will exit long positions and open short positions in the opposite direction (expecting a movement of 30–35 points downward from the level). One can expect growth of the pair as part of the continued bullish market. Important! Before buying, make sure the MACD indicator is above the zero mark and is just beginning to rise from it.
Scenario No. 2: I also plan to buy USD/JPY today in the case of two consecutive tests of the 156.05 price at a moment when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 156.45 and 156.77 can be expected.
Sell Signal
Scenario No. 1: Today, I plan to sell USD/JPY after the 156.05 level is updated (the red line on the chart), which will lead to a rapid decline of the pair. The key target for sellers will be the 155.59 level, where I will exit short positions and immediately open long positions in the opposite direction (expecting a movement of 20–25 points upward from the level). Continued pressure on the pair is unlikely today. Important! Before selling, make sure the MACD indicator is below the zero mark and is just beginning its decline from it.
Scenario No. 2: I also plan to sell USD/JPY today in the case of two consecutive tests of the 156.45 price at a moment when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 156.05 and 155.59 can be expected.
What's on the Chart:
- Thin green line – entry price at which the trading instrument can be bought
- Thick green line – expected price where Take Profit may be set or profit may be taken manually, as further growth above this level is unlikely
- Thin red line – entry price at which the trading instrument can be sold
- Thick red line – expected price where Take Profit may be set or profit may be taken manually, as further decline below this level is unlikely
- MACD indicator – When entering the market, it is important to be guided by overbought and oversold zones
Important
Beginner Forex traders need to make market entry decisions very carefully. Before important fundamental reports are released, it is best to stay out of the market to avoid sharp price movements. If you decide to trade during news releases, always set stop-loss orders to minimize losses. Without stop-losses, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
And remember that successful trading requires a clear trading plan, such as the one I presented above. Spontaneous decision-making based on the current market situation is inherently a losing strategy for an intraday trader.
