20.12.202306:09 Forex Analysis & Reviews: Analysis and trading tips for USD/JPY on December 20

Analysis of transactions and tips for trading USD/JPY

Further growth became limited because the test of 144.71 coincided with the significant rise of the MACD line away from zero. Similarly, further decline halted because the test of 144.15 occurred when the MACD dropped sharply from zero.

Yen plummeted after the Bank of Japan left interest rates unchanged at -0.1%. The new forecasts also gave no hints of policy changes in the coming year. However, today, good data on Japan's trade balance supported yen, putting pressure back on the pair. This situation may continue as a more significant spike in volatility may be seen during the European session.

For long positions:

Buy when the price hits 144.14 (green line on the chart) and take profit at 144.83. Growth will occur if buyers manage to protect the local low.

When buying, ensure that the MACD line lies above zero or rises from it. Also consider buying USD/JPY after two consecutive price tests of 143.74, but the MACD line should be in the oversold area as only by that will the market reverse to 144.14 and 144.83.

For short positions:

Sell when the price reaches 143.74 (red line on the chart) and take profit at 143.06. Pressure may gradually return as dollar demand remains quite weak.

When selling, ensure that the MACD line lies below zero or drops down from it. Also consider selling USD/JPY after two consecutive price tests of 144.14, but the MACD line should be in the overbought area as only by that will the market reverse to 143.74 and 143.06.

What's on the chart:

Thin green line - entry price at which you can buy USD/JPY

Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.

Thin red line - entry price at which you can sell USD/JPY

Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.

MACD line- it is important to be guided by overbought and oversold areas when entering the market

Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.