USD/JPY: Tips for Beginner Traders on December 24th (U.S. Session)

[Ben Graham]

Trade Breakdown and Trading Advice for the Japanese Yen

The test of the 155.87 price level occurred at a moment when the MACD indicator was just starting to move upward from the zero line, which confirmed a correct entry point for buying the dollar. As a result, the pair did not rise significantly, as trading remained within the channel.

In the second half of the day, weekly data on the number of new applications for unemployment benefits in the United States are expected to be released. These figures are extremely important, as they represent one of the most up-to-date indicators of labor market health. However, this report should not be given too much weight—especially ahead of the Christmas holidays. Only strong and unexpected deviations from the consensus forecast are capable of triggering volatility in financial markets and affecting the value of the U.S. currency.

As for the intraday strategy, I will rely more on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy USD/JPY today if the entry point is reached around 155.99 (green line on the chart), with a growth target at 156.43 (the thicker green line on the chart). Around 156.43, I will exit long positions and open short positions in the opposite direction (expecting a move of 30–35 points in the opposite direction from that level). Further growth of the pair can be expected as part of the trend continuation. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in the event of two consecutive tests of the 155.76 price level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 155.99 and 156.43 can be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY today after a break below (or update of) the 155.76 level (red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be the 155.35 level, where I plan to exit short positions and also immediately open long positions in the opposite direction (expecting a move of 20–25 points in the opposite direction from that level). Pressure on the pair may return today in the event of weak U.S. data.Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today in the event of two consecutive tests of the 155.99 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 155.76 and 155.35 can be expected.

What's on the Chart:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated price where Take Profit can be set or profits can be fixed manually, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated price where Take Profit can be set or profits can be fixed manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to be guided by overbought and oversold zones.

Important. Beginner Forex traders need to be extremely cautious when making decisions about entering the market. Ahead of major fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly—especially if you do not use money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.

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