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Trade analysis and tips for trading the Japanese yen
There were no tests of the levels I indicated in the first half of the day, although the pair traded quite close to the 155.79 price. Against this background, I had to reconsider the technical picture and narrow down the nearest levels from which I plan to make decisions. Data from Japan did not attract much interest from traders, although the statistics could have been better. In the second half of the day, we expect figures on the University of Michigan Consumer Sentiment Index and inflation expectations. Inflation plays a key role in determining monetary policy in the US, so if there are concerns about its further increase, the dollar may significantly strengthen its position against the yen. If we don't see anything unusual in the figures, trading will likely continue in a sideways channel, which is undesirable. As for the intraday strategy, I plan to act based on the realization of scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy USD/JPY when the entry point reaches around 155.81 (green line) to rise to 156.13 (thicker green line on the chart). At around 156.13, I will exit purchases and open sales in the opposite direction (targeting a movement of 30-35 points in the opposite direction from the level). Today, you can expect the pair to rise further in continuation of the bullish market. Important! Before buying, ensure that the MACD indicator is above the zero mark and just starting to rise from it.
Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the price at 155.62 when the MACD indicator is in oversold territory. This will limit the downward potential of the pair and lead to a reversal of the market upwards. Expect growth towards the opposite levels of 155.81 and 156.13.
Sell Signal
Scenario #1: Today, I plan to sell USD/JPY after updating the level of 155.62 (red line on the chart), leading to a rapid decline in the pair. The key target for sellers will be 155.31, where I will exit sales and immediately open purchases in the opposite direction (targeting a movement of 20-25 points in the opposite direction from the level). Pressure on the pair will return in case of very poor US data and problems overcoming the daily high. Important! Before selling, make sure that the MACD indicator is below the zero mark and just starting its decline from it.
Scenario #2: I also plan to sell USD/JPY today in the event of two consecutive tests of the price at 155.81 when the MACD indicator is in overbought territory. This will limit the upward potential of the pair and lead to a market reversal downwards. Expect a decrease towards the opposite levels of 155.62 and 155.31.
On the chart:
Thin green line - entry price, at which the trading instrument can be bought.
Thick green line - the expected price, where you can set Take Profit or manually take profits, as further growth above this level is unlikely.
Thin red line - entry price at which the trading instrument can be sold.
Thick red line - the expected price, where you can set Take Profit or manually take profits, as further decline below this level is unlikely.
MACD indicator. When entering the market, it is important to consider overbought and oversold zones.
Important. Beginner traders in the Forex market should be very careful when deciding to enter the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp exchange rate fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. You must set stop orders to avoid losing your entire deposit, especially if you don't use money management and trade large volumes.
And remember that successful trading requires a clear trading plan, like the one I presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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