31.08.202614:01 Forex Analysis & Reviews: USD/JPY: Trading Tips for Beginner Traders – August 31 (US Session)

Trade Analysis and Trading Tips for the Japanese Yen

The price test of 159.71 occurred when the MACD indicator had just started moving downward from the zero line, confirming that the entry point for selling the dollar was correct. As a result, the pair declined by 15 points.

In the second half of the day, the US market will have no important economic data, leaving the market to rely mainly on the G20 meeting and on possible, although unlikely, comments from Fed officials. For the yen, continued dollar strength means that USD/JPY may remain at elevated levels, as the gap between the approaches of the determined Fed and the much more cautious Bank of Japan remains wide. This contrast continues to weigh on the Japanese currency on days without significant economic data.

As for the intraday strategy, I will focus more on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy USD/JPY when the entry point is reached around 159.79 (the green line on the chart), with a target of rising toward 160.15 (the thicker green line on the chart). Around 160.15, I will exit the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. A rise in the pair can be expected today, but the upward potential is rather limited. Important! Before buying, make sure that the MACD indicator is above the zero line and has only just begun rising from it.

Scenario #2: Today, I also plan to buy USD/JPY if the price tests 159.60 twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward reversal. A rise toward the opposite levels of 159.79 and 160.15 can be expected.

Sell Signal

Scenario #1: Today, I plan to sell USD/JPY after the 159.60 level is updated (the red line on the chart), which should lead to a rapid decline in the pair. The sellers' key target will be 159.28, where I will exit the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Pressure on the pair will return if the central bank intervenes. Important! Before selling, make sure that the MACD indicator is below the zero line and has only just begun declining from it.

Scenario #2: Today, I also plan to sell USD/JPY if the price tests 159.79 twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 159.60 and 159.28 can be expected.

What the Chart Shows:

• 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 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 expected price at which Take Profit can be set or profits 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 be very cautious when making market-entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire account balance very quickly, especially if you do not use proper money management and trade 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 fundamentally a losing strategy for an intraday trader.