23.01.202510:05 Forex Analysis & Reviews: USD/JPY: Simple Trading Tips for Beginner Traders on January 23. Analysis of Yesterday's Forex Trades

Analysis of Trades and Trading Tips for the Japanese Yen

The test at 155.90 occurred when the MACD indicator had just started to move upward from the zero line, confirming that this was a valid entry point for buying the dollar. As a result, the currency pair rose to the target level of 156.55.

Despite ongoing discussions about potential changes in the Bank of Japan's policy for tomorrow, these expectations have not significantly strengthened the yen. The swap market currently anticipates a 25 basis point rate hike by the BOJ as almost certain, following the hawkish comments made by the central bank governor yesterday. As a result, the downward momentum for the USD/JPY pair has stalled. The pair has not yet broken through the support level near its 50-day moving average, raising questions about the future strength of the yen. It appears that any further appreciation of the yen will likely depend on additional comments from the BOJ regarding its plans to continue tightening monetary policy, particularly for the first half of the year.

For today's intraday strategy, I plan to rely primarily on implementing Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today at 156.78 (green line on the chart), targeting a rise to 157.49 (thicker green line on the chart). At 157.49, I will exit my long positions and open short positions for a 30-35 pips pullback. It's best to return to buying the pair on corrections and significant USD/JPY dips. Important: Before buying, ensure the MACD indicator is above the zero line and just beginning to rise.

Scenario #2: I also plan to buy USD/JPY today after two consecutive tests of 156.44, provided the MACD indicator is in the oversold zone. This will limit the pair's downside potential and lead to an upward market reversal. Expected targets are 156.78 and 157.49.

Sell Signal

Scenario #1: I plan to sell USD/JPY today after a breakout below 156.44 (red line on the chart), likely leading to a quick decline in the pair. The primary target for sellers will be 155.83, where I will exit my short positions and immediately open long positions for a 20-25 pip rebound. Selling pressure could return at any time. Important: Before selling, ensure the MACD indicator is below the zero line and beginning to fall.

Scenario #2: I also plan to sell USD/JPY today after two consecutive tests of 156.78, provided the MACD indicator is in the overbought zone. This will limit the pair's upside potential and lead to a market reversal downward. Expected targets are 156.44 and 155.83.

Chart Notes

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
• Thin red line: Entry price for selling the trading instrument.
• Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
• MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.

Important Note for Beginner Traders

• Always approach market entry decisions cautiously.
• Avoid trading during major news releases to sidestep volatile price swings.
• If trading during news releases, always set stop-loss orders to minimize losses.
• Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.
• A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous for intraday traders.