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Analysis of transactions and tips on trading the Japanese yen
The price test of 156.80 came when the MACD went up a lot from zero, limiting the pair's upward potential. For this reason, I did not buy. It has yet to be possible to wait for the implementation of scenario No. 2 for sale. In the afternoon, we await figures on the index of business activity in the manufacturing sector, the index of business activity in the services sector, and the composite index of the US PMI. If the data finds something to please traders, the upward trend in USD/JPY will continue. In addition, there are also figures related to the labor market, namely the weekly report on the number of initial applications for unemployment benefits. It will also be interesting to see how things are going in the US primary housing market with sales. A sharp decline in indicators will spoil the mood of dollar buyers betting on the development of the trend. As for the intraday strategy, I plan to act based on implementing scenarios No. 1 and No. 2.
Buy signal
Scenario No. 1: I plan to buy USD/JPY today when I reach the entry point of 156.75 (green line) to grow to 157.09 (thicker green line on the chart). In the area of 157.09, I will exit purchases and open sales in the opposite direction (counting on a movement of 30-35 points in the opposite direction from the level). It is possible to count on the pair's growth today in continuation of the trend, but this requires strong data on the United States. Important! Before buying, ensure the MACD indicator is above the zero mark and is just starting to grow from it.
Scenario No. 2: I also plan to buy USD/JPY today for two consecutive price tests of 156.59 when the MACD indicator will be in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. We can expect an increase to the opposite levels of 156.75 and 157.09.
Sell signal
Scenario No. 1: I plan to sell USD/JPY today after updating the level of 156.59 (the red line on the chart), leading to a rapid decline in the pair. The key target of sellers will be the 156.30 level, where I will exit sales and immediately open purchases in the opposite direction (counting on a movement of 20-25 points in the opposite direction from the level). The pressure on the pair will return in case of an unsuccessful consolidation in the area of the daily maximum. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning to decline.
Scenario #2: I also plan to sell USD/JPY today in the event of two consecutive tests of the price at 156.75 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 decline to the opposite levels of 156.59 and 156.30.
Chart Key:
Thin green line – the entry price at which the trading instrument can be bought;
Thick green line – the anticipated price where Take Profit can be set, or profits 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 anticipated price where Take Profit can be set, or profits can be taken manually, as further decline below this level is unlikely;
MACD Indicator – using overbought and oversold zones when entering the market is important.
Important Notes for Beginner Forex Traders:
Be very cautious when making market entry decisions. To avoid sudden price fluctuations, it's best to stay out of the market before the release of important fundamental reports. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes.
Successful trading requires a clear plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are a losing strategy for intraday traders.
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