31.07.202410:03 Forex Analysis & Reviews: USD/JPY: trading tips for beginners for the European session on July 31

Overview of trading and tips on USD/JPY

The price test of 154.72 occurred when the MACD indicator started to move down from the zero mark, confirming the entry point for selling the dollar. As a result, USD/JPY dropped 40 pips. Buying on the rebound from 154.38, according to scenario No. 2, yielded an additional profit of about 25 pips. Today, the Japanese yen rose sharply again, gaining over 250 pips against the dollar. This happened after the Bank of Japan decided to raise interest rates. Although this decision was widely anticipated, the dollar plunged, which buyers took advantage of since the final word will still come from the Federal Reserve and its decision on rates. We will find out the results this evening and discuss them in more detail in the forecast for the U.S. session. Nevertheless, it is better to continue trading with the trend and look for suitable entry points for selling USD/JPY. As for the intraday strategy, I will rely more on implementing scenarios No. 1 and 2.

Buy signals

Scenario No. 1. Today, I plan to buy USD/JPY when the price reaches the entry point around 153.16, plotted by the green line on the chart, with the goal of rising to the level of 153.72 plotted by the thicker green line on the chart. Around 153.72, I will exit long positions and open short ones in the opposite direction, expecting a movement of 30-35 pips in the opposite direction from that level. You can count on the pair to rise today, as prices for buying the dollar are very attractive. Before buying, ensure the MACD indicator is above the zero mark and just starting to rise from it.

Scenario No. 2. I also plan to buy USD/JPY today in case of two consecutive tests of 152.62 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reverse market upturn. One can expect growth to the opposite levels of 153.16 and 153.72.

Sell signals

Scenario No. 1. I plan to sell USD/JPY today only after testing the level of 152.62 plotted by the red line on the chart, which will lead to a rapid decline in the pair. The key target for sellers will be 152.05, where I will exit short positions and immediately open long positions in the opposite direction, expecting a movement of 20-25 pips in the opposite direction from that level. Pressure on USD/JPY may return at any moment, especially if the price fails to consolidate around the intraday high. Before selling, ensure the MACD indicator is below the zero mark and starting to decline.

Scenario No. 2. I also plan to sell USD/JPY today in case of two consecutive price tests at 153.16 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse market downturn. One can expect a decline to the opposite levels, 152.62 and 152.05.

What's on the chart:

Thin green line: the entry price at which you can buy the trading instrument.

Thick green line: the estimated price at which you can set Take Profit or manually close positions, as further growth above this level is unlikely.

Thin red line: the entry price at which you can sell the trading instrument.

Thick red line: an estimated price at which you can place Take Profit or manually close positions, as further decline below this level is unlikely.

MACD indicator: when entering the market, it is essential to be guided by overbought and oversold zones.

Important: Novice traders in the forex market must be cautious when deciding to enter the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You must set stop orders to avoid losing your entire deposit, especially if you don't use money management and trade in large volumes.

Remember, a clear trading plan, like the one I've outlined, is essential for successful trading. Making impulsive decisions based on the current market situation is a losing strategy for novice intraday traders.