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The price test at 161.94 coincided with the moment when the MACD indicator had moved significantly above the zero mark, limiting the pair's upward potential. The second test at 161.94 prompted the implementation of Scenario #2 to sell the dollar; however, the pair did not decline significantly.
Positive news from the Middle East on the improvement in US-Iran relations did not affect the USD/JPY pair yesterday, allowing it to continue its upward trend. Despite all threats of intervention by the Japanese central bank to address the current decline in the yen, nothing has materialized so far. A sharp jump today above 162 yen per dollar, reaching the level of 162.35, indicates a very difficult situation for the yen against the dollar, as the disparity in monetary policy between the central banks increases pressure on the yen day by day.
The pressure on the yen is also increasing due to other factors. High inflation in Japan, which had long been under control, is beginning to negatively affect the purchasing power of the population. The rising prices of imported goods further undermine the position of the national currency. The government faces a challenging task of balancing the need to contain inflation with the risk of slowing economic growth.
As for the intraday strategy, I will rely more on implementing scenarios #1 and #2.
Scenario #1: I plan to buy USD/JPY today at an entry point around 162.37 (green line on the chart), targeting a move to 162.70 (thicker green line on the chart). At around 162.70, I plan to exit the long positions and sell immediately on the pullback (expecting a movement of 30-35 pips in the opposite direction from the level). It is best to resume buying the pair during corrections and significant pullbacks in USD/JPY. 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 161.17 when the MACD indicator is in the oversold area. This would limit the pair's downward potential and lead to an upward market reversal. We can expect growth to opposite levels of 162.37 and 162.70.
Scenario #1: I plan to sell USD/JPY today only after it breaks the level of 162.17 (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 161.84, where I plan to exit short positions and immediately buy back in the opposite direction (expecting a move of 20-25 pips in the opposite direction from that level). Sellers may return at any moment, requiring only any hint from the central bank. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning to decline from it.
Scenario #2: I also plan to sell USD/JPY today in the event of two consecutive tests of the price 162.37 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 162.17 and 161.84.
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.
*Analiza tržišta koja se ovde nalazi namenjena je boljem razumevanju tržišta i ne pruža instrukcije za vršenje trgovanja.
Uz InstaSpot-ove analitičke preglede uvek ćete biti u toku sa tržišnim trendovima! Klijentima InstaSpot-a su dostupni mnogobrojni besplatni servisi za uspešno trgovanje.
