23.09.202612:26 Forex Analysis & Reviews: USD/JPY: Trading Tips for Beginner Traders – September 23 (U.S. Session)

Review of Trades and Trading Advice for the Japanese Yen

The price test of 157.71 occurred when the MACD indicator had just started moving upward from the zero line, confirming the validity of the entry point for buying the dollar. As a result, the pair rose by more than 20 points.

The dollar continues to strengthen across the board, and the Japanese yen is no exception. In the evening, the market will focus on the U.S. September PMI data — the manufacturing, services, and composite indices — which, judging by their steady performance in recent months, may once again come in stronger than expected. I believe such a result could provide the dollar with a new reason for buying, especially combined with a speech by Federal Reserve Governor Michael Barr, whose rhetoric lately has been quite consistent with the hawkish stance of other Fed officials.

For the yen, an additional source of pressure is the fact that no economic data was released in Japan today, while the latest data from the country, including a significantly deteriorated trade balance and an unexpected collapse in machinery and equipment orders, painted more of a picture of weakening domestic demand than provided grounds for confidence in further interest-rate hikes by the Bank of Japan. Against this backdrop, in my view, USD/JPY will continue to receive support from the growing contrast between the Fed's decisive stance and the much more cautious position of the Japanese central bank. If today's U.S. data, together with Barr's comments, confirms this picture, the pair could well test new local highs before the end of the session.

As for the intraday strategy, I will focus more on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy USD/JPY when the entry point is reached around 157.96 (the green line on the chart), targeting a rise toward 158.35 (the thicker green line on the chart). Around 158.35, I will exit the long position and open short positions in the opposite direction (targeting a move of 30–35 points in the opposite direction from the level). A rise in the pair today can be expected, but the prospects are rather uncertain. Important! Before buying, make sure that the MACD indicator is above the zero line and has only just started rising from it.

Scenario No. 2: Today, I also plan to buy USD/JPY if there are two consecutive tests of the 157.73 price level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger a reversal to the upside. A rise toward the opposite levels of 157.96 and 158.35 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell USD/JPY after the 157.73 level is updated (the red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 157.40, where I will exit the short position and immediately open long positions in the opposite direction (targeting a move of 20–25 points in the opposite direction from the level). Pressure on the pair will return today in the event of central bank intervention. Important! Before selling, make sure that the MACD indicator is below the zero line and has only just started declining from it.

Scenario No. 2: Today, I also plan to sell USD/JPY if there are two consecutive tests of the 157.96 price level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and trigger a reversal to the downside. A decline toward the opposite levels of 157.73 and 157.40 can be expected.

What Is Shown on the Chart:

• Thin green line — the entry price at which the trading instrument can be bought;
• Thick green line — the expected price at which Take Profit can be placed or profit can be taken manually, as further growth above this level is unlikely;
• Thin red line — the entry price at which the trading instrument can be sold;
• Thick red line — the expected price at which Take Profit can be placed or profit can be taken manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold zones into account.

Important. Beginner Forex traders need to exercise great caution when making decisions about entering the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid exposure to sharp exchange-rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade with large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.