Trade Analysis and Advice on Trading the Japanese Yen
The designated levels were not tested in the first half of the day. We did not reach 144.17, and even if we had, the MACD at that time was still in overbought territory.
Today, besides the important U.S. Personal Consumption Expenditures (PCE) Price Index, data on changes in household income and spending in the U.S. will also be published. Increased spending supported by rising wages indicates strong consumer demand, which contributes to economic growth. Conversely, a decline in these figures may signal a slowdown in economic development and the need for stimulus measures. Additionally, the University of Michigan Consumer Sentiment Index will be released, reflecting citizens' optimism and confidence in the future. A high index reading suggests consumers are ready to spend, positively impacting retail sales and overall economic growth, while a low index reading indicates concern and uncertainty, which could lead to reduced consumer spending.
To close the day, remarks are expected from FOMC member Raphael Bostic, whose comments on the current economic situation and future monetary policy could significantly influence market sentiment. His speech, especially in light of the released economic data, will be closely analyzed by investors for any signals regarding potential interest rate changes or other measures to support economic growth and control inflation.
As for the intraday strategy, I will mainly rely on the implementation of Scenario #1 and Scenario #2.
Buy Signal
Scenario #1: Today, I plan to buy USD/JPY upon reaching the entry point around 144.23 (green line on the chart), aiming for growth toward 145.05 (thicker green line). I plan to exit the market at 145.05 and also sell USD/JPY in the opposite direction, targeting a 30–35 point move from the entry point. A good rise in the pair can be expected today after strong economic data. Important! Before buying, make sure the MACD indicator is above the zero mark and just beginning to rise.
Scenario #2: I also plan to buy USD/JPY today in case of two consecutive tests of 143.67 when the MACD indicator is in oversold territory. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 144.23 and 145.05 can be expected.
Sell Signal
Scenario #1: I plan to sell USD/JPY after the 143.67 level is updated (red line on the chart), leading to a quick decline in the pair. The key target for sellers will be 142.85, where I plan to exit the market and immediately buy in the opposite direction, targeting a 20–25 point move. Selling pressure on the pair is expected to persist today. Important! Before selling, make sure the MACD indicator is below the zero mark and just beginning to decline.
Scenario #2: I also plan to sell USD/JPY today in the case of two consecutive tests of 144.23 when the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 143.67 and 142.85 can be expected.
On the Chart:
- Thin green line – the entry price for buying the trading instrument;
- Thick green line – the approximate price for setting Take Profit or manually fixing profit, as further growth beyond this level is unlikely;
- Thin red line – the entry price for selling the trading instrument;
- Thick red line – the approximate price for setting Take Profit or manually fixing profit, as further decline beyond this level is unlikely;
- MACD Indicator: When entering the market, it is important to rely on overbought and oversold areas.
Important: Beginner Forex traders must exercise great caution when making market entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize losses. Without stop-loss orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
And remember, for successful trading, you must have a clear trading plan like the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.
