Analysis of Trades and Tips for Trading the Japanese Yen
The test of the 156.83 level occurred when the MACD indicator had moved significantly below the zero line, limiting the pair's downward potential. For this reason, I sold the dollar. Shortly afterward, another test of 156.83 took place with the MACD in the oversold zone, providing a good signal for implementing Scenario #2 for buying. However, no significant upward movement materialized.
Today, key U.S. economic data, including inflation indicators and economic performance metrics, will likely trigger market movements. The dollar will gain an advantage and resume its upward trend if the Core Personal Consumption Expenditures Index (the Fed's preferred inflation measure), along with consumer spending and income data for November, show growth. The University of Michigan's Consumer Sentiment Index and inflation expectations, along with a speech by FOMC member Mary Daly, will also be closely watched. Regarding intraday strategy, I will focus on Scenario #1 and Scenario #2.
Buy Signal
Scenario #1: Today, I plan to buy USD/JPY at 156.96 (green line on the chart) with a target of 157.55 (thicker green line on the chart). At 157.55, I will exit the buy trade and open sell positions in the opposite direction, anticipating a 30–35 point downward move from the entry point. This scenario relies on the continuation of the upward trend.Important: Before buying, ensure that the MACD indicator is above the zero mark and just starting to rise.
Scenario #2: I also plan to buy USD/JPY if there are two consecutive tests of the 156.61 level, with the MACD indicator in the oversold zone. This will limit the pair's downward potential and trigger a market reversal upward. Growth toward 156.96 and 157.55 can then be expected.
Sell Signal
Scenario #1: I plan to sell USD/JPY after breaking below the 156.61 level (red line on the chart), targeting 156.04. At this level, I will exit the sell trade and immediately buy in the opposite direction, anticipating a 20–25 point upward move. Selling pressure will only return after weak U.S. data.Important: Before selling, ensure that the MACD indicator is below the zero mark and just starting to decline.
Scenario #2: I also plan to sell USD/JPY if there are two consecutive tests of the 156.96 level, with the MACD indicator in the overbought zone. This will limit the pair's upward potential and trigger a market reversal downward. A decline toward 156.61 and 156.04 can then be expected.
Chart Overview
- Thin green line: Entry price for buying the instrument.
- Thick green line: Target price for taking profit or manually closing the trade, as further growth beyond this level is unlikely.
- Thin red line: Entry price for selling the instrument.
- Thick red line: Target price for taking profit or manually closing the trade, as further decline beyond this level is unlikely.
- MACD Indicator: When entering the market, pay attention to overbought and oversold zones.
Important Notes for Beginner Forex Traders
- Exercise extreme caution when entering the market, especially before key fundamental reports are released. It is better to stay out of the market during these times to avoid sharp price fluctuations.
- If you choose to trade during news releases, always set stop-loss orders to minimize potential losses. Without stop-losses, you could quickly lose your entire deposit, especially if you trade large volumes without proper money management.
- Always have a clear trading plan, like the one provided above. Making spontaneous trading decisions based on current market conditions is a losing strategy for intraday traders.
