29.07.202609:26 Forex Analysis & Reviews: USD/JPY: Simple Trading Tips for Beginner Traders on July 29. Analysis of Yesterday's Forex Trades

Trade Analysis and Tips for the Japanese Yen

The test at 163.88 coincided with the moment when the MACD indicator was just starting to move downward from the zero mark, confirming an appropriate entry point for selling the dollar. As a result, the pair declined towards the target level of 163.63.

Yesterday, the dollar weakened against the yen under pressure from weak macroeconomic data, with the key element being a decline in US consumer confidence. The indicator dropped to 90.8 points, and other secondary data also worked against the US currency. The deterioration in consumer sentiment reduced expectations for the Federal Reserve's rate and pulled down US Treasury yields, which deprived the dollar of support. The Japanese yen responded by strengthening. The decline in US yields narrowed the interest rate gap with Japan, making the yen more attractive and driving the USD/JPY pair downward. This decline shifted the focus away from currency intervention, since excessively rapid weakening of the yen typically forces the Bank of Japan to enter the market, while strengthening the national currency alleviates this threat and reduces the likelihood of government intervention. However, the future direction of the pair today will entirely depend on the outcomes of the Fed meeting in the US.

Regarding the intraday strategy, I will primarily rely on implementing scenarios #1 and #2.

Buying Scenarios

Scenario #1: I plan to buy USD/JPY today at an entry point around 163.63 (green line on the chart), with a target at 163.94 (thicker green line on the chart). Around 163.94, I plan to exit long positions and open short positions in the opposite direction (expecting a move of 30-35 pips in the opposite direction from the level). It is best to return to buying the pair during corrections and significant pullbacks of USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting to rise from there.

Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the price 163.49 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. A rise to the opposite levels of 163.63 and 163.94 can be expected.

Selling Scenarios

Scenario #1: I plan to sell USD/JPY today only after the level of 163.49 is updated (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 163.22, where I intend to exit shorts and immediately open longs in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Sellers could return at any moment; all it takes is any hint from the central bank. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting to decline from there.

Scenario #2: I also plan to sell USD/JPY today in the case of two consecutive tests of the price 163.63 when the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a market reversal downwards. A decline to the opposite levels of 163.49 and 163.22 can be expected.

What's on the Chart:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price 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 – estimated price 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 be guided by the zones of overbought and oversold.

Important: New traders in the Forex market should make decisions about market entry very cautiously. Before the release of 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 news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, like the one outlined above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.