Analysis of Trades and Trading Tips for the Japanese Yen
The test of the 149.58 price level occurred when the MACD indicator was beginning to move upward from the zero mark, confirming the correct entry point for buying the dollar. However, the pair failed to rise, resulting in losses. By the middle of the session, a test of the 149.19 level took place when the MACD indicator started moving downward from the zero mark, confirming the correct entry point for selling the dollar. This led to a drop in the pair to the target of 148.50. Buying from that level on a rebound secured approximately 40 pips in profit.
Yesterday, Bank of Japan Governor Kazuo Ueda's speech reinforced traders' confidence that the BOJ will continue raising interest rates, strengthening the yen against the dollar. The dollar has been under pressure recently due to speculation that the U.S. Federal Reserve may have to continue cutting interest rates. This would widen the policy gap between the central banks, further supporting the yen. In the coming days, market volatility will persist as traders continue analyzing economic data and central bank officials' comments for clues about future monetary policy trajectories.
For intraday strategy, I will focus more on executing Scenarios #1 and #2.
Buy Signal
Scenario #1: I plan to buy USD/JPY today if it reaches the entry point around 149.31 (green line on the chart), aiming for an increase to the 149.98 level (thicker green line on the chart). At the 149.98 level, I intend to exit the buy position and open a sell trade in the opposite direction, expecting a downward movement of 30-35 pips. Buying the pair is best done on corrections and significant pullbacks of USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and beginning to rise.
Scenario #2: Another buying opportunity arises if the price tests the 148.95 level twice in succession while the MACD indicator is in the oversold area. This would limit the pair's downside potential and lead to a market reversal upwards. A rise to the opposite levels of 149.31 and 149.98 can be expected.
Sell Signal
Scenario #1: I plan to sell USD/JPY today only after breaking below the 148.95 level (red line on the chart), which should trigger a quick decline in the pair. The key target for sellers will be the 148.26 level, where I intend to exit the sell position and immediately open a buy trade in the opposite direction, expecting a movement of 20-25 pips upwards. Pressure on the pair could return at any moment. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning to decline from it.
Scenario #2: Another selling opportunity arises if the price tests the 149.31 level twice in succession while the MACD indicator is in the overbought area. This would limit the pair's upward potential and lead to a market reversal downward. A decline to the opposite levels of 148.95 and 148.26 can be expected.
What's on the Chart:
- The thin green line represents the entry price where the trading instrument can be bought.
- The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
- The thin red line represents the entry price where the trading instrument can be sold.
- The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
- The MACD indicator should be used to assess overbought and oversold zones when entering the market.
Important Notes:
- Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
- Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.
