USD/JPY: Tips for Beginner Traders for October 29th (U.S. Session)

[Ben Graham]

Trade Analysis and Recommendations for the Japanese Yen

The price test of 152.07 occurred when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential. The second test of 152.07 triggered Scenario #2 for buying the dollar, resulting in a rise of more than 40 points for the pair.

After lunch, the key event will be the FOMC decision on the key interest rate. It is expected to be cut by 0.25%, but equally important will be the FOMC's accompanying comments and Jerome Powell's press conference. A neutral tone from the Fed Chair could have a positive effect on U.S. dollar positions. However, if Powell expresses concern about slowing U.S. labor market growth and highlights the possibility of further monetary easing, the dollar could weaken against other currencies, leading to a decline in the USD/JPY pair.

There are no other major economic releases today, so the Fed Chair's press conference will be of critical importance.

It's also important not to forget about technical factors — the breakout of key support or resistance levels may trigger significant market volatility. Traders should closely monitor these levels and be prepared for various developments.

As for intraday strategy, I'll focus mainly on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy USD/JPY when the price reaches around 152.49 (green line on the chart), with a target at 153.06 (thicker green line on the chart). Around 153.06, I plan to close long positions and open short positions in the opposite direction, expecting a 30–35-point pullback. Growth in the pair is likely only if the Fed takes a strong (hawkish) stance.

Important! Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.

Scenario #2: I also plan to buy USD/JPY if there are two consecutive tests of the 152.18 level while the MACD is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upward. A rise toward 152.49 and 153.06 can then be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY after the price breaks below 152.18 (red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 151.60, where I plan to exit short positions and open long positions in the opposite direction, expecting a 20–25-point rebound. Downward pressure on the pair may return if the Fed takes a dovish stance.

Important! Before selling, make sure the MACD indicator is below the zero line and just starting to fall from it.

Scenario #2: I also plan to sell USD/JPY if there are two consecutive tests of the 152.49 level while the MACD is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. A decline toward 152.18 and 151.60 can then be expected.

Chart Explanation

• Thin green line – Entry price where buying the instrument is possible
• Thick green line – Suggested Take Profit level or a point to manually secure profits, as further growth above this level is unlikely
• Thin red line – Entry price where selling the instrument is possible
• Thick red line – Suggested Take Profit level or a point to manually secure profits, as further decline below this level is unlikely
• MACD indicator – When entering the market, rely on overbought and oversold zones

Important Notes for Beginner Forex Traders

Beginner traders should be extremely cautious when deciding to enter the market. Before the release of important fundamental reports, it's best to stay out of the market to avoid sharp price fluctuations.

If you choose to trade during news releases, always set stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit — especially if you neglect money management principles and trade with large volumes.

And remember: successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on short-term market movements is inherently a losing strategy for intraday traders.

The material has been provided by InstaForex Company - www.instaforex.com