Analysis of Trades and Trading Tips for the Japanese Yen
The test of the 146.86 price level occurred when the MACD indicator had just begun to move downward from the zero mark, confirming a suitable entry point for selling the dollar in line with the trend. However, after the pair dropped by 25 pips, the pressure eased.
Today's data indicating slower GDP growth in Japan has weakened the yen's position. The published figures show a slowdown in Japan's economic recovery, raising concerns among investors and analysts. Declines in business activity and consumer spending are putting pressure on growth prospects, making the yen less attractive as an investment asset. With the Bank of Japan raising interest rates, the slowdown in economic growth is a worrying sign that may lead traders to shift their focus towards more stable currencies and safe-haven assets, further increasing pressure on the yen.
Additionally, a decline has been observed in Japan's money supply aggregate. Although this trend is less pronounced than in the U.S. or Europe, it raises concerns within Japan's financial circles. Japan has long struggled with deflation and aimed to stimulate money supply growth to boost the economy. A slowdown in money supply growth could signal an economic downturn or even a return to deflationary trends.
For intraday strategy, I will primarily rely on Scenarios #1 and #2.
Buy Signal
Scenario #1: I plan to buy USD/JPY today upon reaching the entry point around 147.26 (green line on the chart), targeting a rise to 147.69 (thicker green line on the chart). Around 147.69, I intend to exit purchases and open sell positions in the opposite direction, expecting a downward movement of 30-35 pips. It is best to return to buying the pair on pullbacks and significant declines in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning to rise.
Scenario #2: I also plan to buy USD/JPY today if the price tests 146.93 twice in a row while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. A rise to the opposite levels of 147.26 and 147.69 can be expected.
Sell Signal
Scenario #1: I plan to sell USD/JPY today only after breaking below 146.93 (red line on the chart), which should lead to a sharp decline in the pair. The key target for sellers will be 146.46, where I intend to exit sell positions and immediately open buy positions in the opposite direction, expecting a movement of 20-25 pips upward. Pressure on the pair can return at any moment. Important! Before selling, ensure that the MACD indicator is below the zero mark and starting to decline.
Scenario #2: I also plan to sell USD/JPY today if the price tests 147.26 twice a row while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. A decline to the opposite levels of 146.93 and 146.46 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.
