Analysis of transactions and tips on trading the Japanese yen
The price test of 157.03 came when the MACD indicator went up a lot from zero, limiting the pair's upward potential. As a result, although the growth occurred, it could have been stronger. Everything can change quickly in the afternoon, as quite important data on the United States are expected. The main indicators are personal consumption expenditures, changes in the income level of the population, changes in the level of household spending, and the Chicago PMI index. All these indicators have a strong impact on the foreign exchange market. A decrease in indicators is a drop in USD/JPY, while good growth will strengthen the pair, giving the opportunity to return to a weekly maximum. As for the intraday strategy, I plan to act based on implementing scenarios No. 1 and No. 2.
Buy signal
Scenario No. 1: I plan to buy USD/JPY today when I reach the entry point of 157.38 (green line) to grow to 158.15 (thicker green line on the chart). Around 158.15, I will exit purchases and open sales in the opposite direction (counting on a movement of 30-35 points in the opposite direction from the level). Counting on the pair's growth today to continue the trend is possible, but this requires strong US data and active buyer actions at the highs. Important! Before buying, ensure the MACD indicator is above the zero mark and is just starting to grow from it.
Scenario No. 2: I also plan to buy USD/JPY today for two consecutive price tests of 156.97, when the MACD indicator will be in the oversold area. This will limit the pair's downward potential and lead to a reverse upward market reversal. We can expect an increase to the opposite levels of 157.38 and 158.15.
Sell signal
Scenario No. 1: I plan to sell USD/JPY today after updating the level of 156.97 (the red line on the chart), leading to a rapid decline in the pair. The key target of sellers will be the level of 156.22, where I will exit sales and immediately open purchases in the opposite direction (counting on a movement of 20-25 points in the opposite direction from the level). The pressure on the pair will return in case of weak US data. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning its decline.
Scenario No. 2: I also plan to sell USD/JPY today for two consecutive price tests of 157.38, when the MACD indicator will be in the overbought area. This will limit the pair's upward potential and lead to a reverse downward reversal of the market. We can expect a decline to the opposite levels of 156.97 and 156.22.
What's on the chart:
Thin green line is the entry price at which you can buy a trading instrument;
Thick green line is the estimated price where you can place Take Profit or fix profit yourself, since further growth is unlikely above this level;
Thin red line is the entry price at which a trading instrument can be sold;
Thick red line is the estimated price where you can place Take Profit or fix profit yourself, since further decline is unlikely below this level;
MACD indicator. When entering the market, it is important to be guided by overbought and oversold zones.
Important. Novice Forex traders need to make decisions about entering the market very carefully. Before releasing important fundamental reports, it is best to stay out of the market to avoid sharp fluctuations in the exchange rate. If you decide to trade during the news release, always place stop orders to minimize losses. You must place stop orders to lose your entire deposit quickly, especially if you do not use money management but trade in large volumes.
Remember that a clear trading plan, following the example I presented above, is necessary for successful trading. Spontaneous trading decision-making based on the current market situation is an inherently losing strategy for an intraday trader.
