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The price test at 160.20 occurred when the MACD indicator was well above the zero mark, limiting the pair's upward potential. For this reason, I did not buy the dollar.
Today, the Bank of Japan raised its key interest rate to its highest level since 1995 and indicated that further normalization of monetary policy will follow. This took place at a meeting convened without the BoJ's head present. The report stated that the central bank has raised its key interest rate by a quarter of a percentage point to 1%. It was also announced that the bank will maintain its bond purchases at around 2 trillion yen ($12.5 billion) per month, starting from April 2027, indicating an end to the reduction in purchase volumes, which partially mitigates the rigidity regarding interest rates, so a significant drop in the USD/JPY pair did not occur. Initially, this decision strengthened the yen against the US dollar, but it later weakened again as discussions about the US-Iran deal took a negative turn. The lack of specifics and details about the agreement is making traders nervous. For this reason, in the short term, further growth in the USD/JPY pair is expected.
Regarding the intraday strategy, I will focus more on implementing scenarios #1 and #2.
Scenario #1: I plan to buy USD/JPY today when the entry point reaches around 160.37 (the green line on the chart), with a target for growth to 160.71 (the thicker green line on the chart). At around 160.71, I intend to exit my long positions and open short positions in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). It is best to return to buying the pair on corrections and significant dips in USD/JPY. Important! Before buying on a breakout, 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 if there are two consecutive tests of the price at 160.17 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. We can expect growth to opposing levels of 160.37 and 160.71.
Scenario #1: I plan to sell USD/JPY today only after the level at 160.17 (the red line on the chart) is broken, which will lead to a rapid decline in the pair. The key target for sellers will be 159.80, where I intend to exit my shorts and immediately buy in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Sellers can return at any moment; any hint from the central bank is all that is needed. Important! Before selling on a breakout, ensure that the MACD indicator is below the zero mark and just starting to decline from it.
Scenario #2: I also plan to sell USD/JPY today if there are two consecutive tests of the price at 160.37 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. We can expect a decrease to the opposing levels of 160.17 and 159.80.
Thin green line – entry price for buying the trading instrument;
Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;
Thin red line – entry price for selling the trading instrument;
Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;
MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.
Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you are not using money management and are trading large volumes.
And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is 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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