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Analysis of Trades and Trading Advice for USD/JPY
The price levels I identified in the morning session were not tested. A minor correction from the weekly high stalled near 154.80, after which the market paused, awaiting significant US economic data. In the second half of the day, US Consumer Price Index (CPI) data and the core index excluding food and energy prices will be released. A rise in core prices will boost the dollar, while a decrease may drive a USD/JPY correction. FOMC members Neel Kashkari and Lorie K. Logan are also set to speak, and their remarks will draw attention. For my intraday strategy, I will primarily rely on Scenario 1, regardless of MACD indicator readings, as I expect strong, directional movement following the data release.
Buy Signal
- Scenario 1: Plan to buy USD/JPY at 155.08 (green line on the chart) with a target of 155.70 (thicker green line on the chart). At 155.70, I plan to exit and open sell positions for a 30-35 point reversal. Further growth is expected in alignment with the prevailing trend.Before buying, ensure the MACD indicator is above the zero line and showing initial upward movement.
- Scenario 2: Another buying opportunity arises if the pair retests 154.74 while the MACD is in the oversold area. This will limit the pair's downward potential and likely lead to a market reversal upward. A rise to 155.08 and 155.70 can be anticipated if US inflation data supports dollar strength.
Sell Signal
- Scenario 1: Plan to sell USD/JPY after breaking below 154.74 (red line on the chart), likely leading to a sharp drop in the pair. The key target for sellers will be 154.17, where I plan to exit and immediately open buy positions for a 20-25 point reversal. Selling pressure will intensify if US inflation data indicates easing inflation.Before selling, ensure the MACD indicator is below the zero line and just starting to decline.
- Scenario 2: Another selling opportunity arises if the pair retests 155.08 while the MACD is in the overbought area. This will limit the pair's upward potential and likely lead to a market reversal downward. A decline to 154.74 and 154.17 can be expected.
On the Chart:
- Thin Green Line: Entry price for buying the trading instrument.
- Thick Green Line: Target price for setting Take Profit or manually securing profits, as further growth above this level is unlikely.
- Thin Red Line: Entry price for selling the trading instrument.
- Thick Red Line: Target price for setting Take Profit or manually securing profits, as further decline below this level is unlikely.
- MACD Indicator: Use overbought and oversold zones to evaluate momentum and guide entry decisions.
Key Considerations for Novice Traders
Novice Forex traders must exercise caution when making market entry decisions. It is advisable to stay out of the market before the release of major fundamental reports to avoid sharp price swings. If you choose to trade during news releases, always set stop-loss orders to minimize losses. Without stop-loss orders, you risk significant losses to your trading account, particularly if you neglect money management and trade large volumes.
Remember: Successful trading requires a clear trading plan, like the one outlined above. Spontaneous trading decisions based on the current market situation often lead to suboptimal outcomes for intraday traders.
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