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The price test at 156.40 occurred at a moment when the MACD indicator was beginning to move up from the zero mark, confirming the correct entry point for buying dollars. As a result, the pair rose by more than 30 pips.
News about the decline in the Tokyo consumer price index and the sharp drop in Japan's industrial production continue to pressure the Japanese yen against the dollar. The overall increase in demand for the U.S. dollar across the currency market also led to a slight strengthening of the USD/JPY pair; however, further upward prospects for the trading instrument remain quite limited. Given that, in the near term, the Bank of Japan is likely to adopt a wait-and-see position, making the yen less attractive to investors seeking higher interest rates, the uncertainty surrounding the Bank of Japan's future policy will continue to exert downward pressure on the yen. The technical analysis of the USD/JPY pair indicates consolidation near current levels. A breakout above resistance could open the path for further growth, but the bearish scenario remains relevant, given fundamental factors and recent statements from authorities about the yen's low value, which keep USD/JPY from a new wave of growth. In the short term, moderate volatility is likely to persist, and traders will closely monitor news from Japan and the U.S. to determine the direction of the pair's movement.
Regarding the intraday strategy, I will primarily focus on the implementation of scenarios No. 1 and No. 2.
Scenario No. 1: I plan to buy USD/JPY today upon reaching an entry point around 156.40 (green line on the chart), targeting a move to 156.74 (thicker green line on the chart). Near 156.74, I intend to exit my long positions and sell back, expecting a movement of 30-35 pips in the opposite direction from the entry point. It's best to return to buying the pair during corrections and significant dips in USD/JPY. Important! Before buying on a breakout, ensure the MACD indicator is above the zero mark and just beginning to rise from it.
Scenario No. 2: I also plan to buy USD/JPY today if there are two consecutive tests of the price 156.23 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. One can expect a rise to the opposite levels of 156.40 and 156.74.
Scenario No. 1: I plan to sell USD/JPY today only after the 156.23 level is updated (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 155.89 level, where I intend to exit my short positions and immediately buy back (expecting a 20-25-pip move in the opposite direction from that level). It is better to sell from as high a point as possible. Important! Before selling on the breakout, ensure that the MACD indicator is below the zero mark and is just beginning to decline from it.
Scenario No. 2: I also plan to sell USD/JPY today if there are two consecutive tests of the price 156.40 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. One can expect a decline to the opposite levels of 156.23 and 155.89.
Beginner Forex traders need to make decisions about entering the market very cautiously. Before major fundamental reports are released, it is best to remain out of the market to avoid getting caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
Remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on current market conditions are inherently a losing strategy for intraday traders.