USD/JPY: Tips for Beginner Traders on December 30th (U.S. Session)

[Ben Graham]

Trade Analysis and Trading Tips for the Japanese Yen

The test of the 155.95 price level occurred when the MACD indicator had already moved significantly downward from the zero line, which limited the pair's downward potential. For this reason, I did not sell the dollar.

In the second half of the day, market participants' attention will be focused on the release of a series of US data. The S&P/Case-Shiller Home Price Index, covering the 20 largest cities, will help assess housing price dynamics and determine how the Fed's current accommodative policy is affecting the real estate market. The Chicago PMI will provide insight into the current state of the region's manufacturing sector. In an environment of economic recovery, PMI data will be an important indicator for gauging business sentiment. However, the publication of the FOMC meeting minutes will be of greatest importance to the market. Particular attention will be paid to any signals regarding the Fed's intentions on further monetary easing or, conversely, the possibility of pausing the rate-cutting cycle. Even the slightest hints of a shift in the regulator's stance could trigger an immediate reaction in the foreign exchange market.

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

Buy Signal

Scenario No. 1: Today, I plan to buy USD/JPY if the entry point is reached near 155.98 (green line on the chart), targeting a rise toward the 156.38 level (the thicker green line on the chart). Around 156.38, 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 upside can be expected in continuation of the prevailing trend.Important! Before buying, make sure the MACD indicator is above the zero line and is just starting to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in the event of two consecutive tests of the 155.81 price level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. A rise toward the opposite levels of 155.98 and 156.38 can be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY today after a break below (update of) the 155.81 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be the 155.49 level, where I will 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 case of weak US data.Important! Before selling, make sure the MACD indicator is below the zero line and is just starting to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today in the event of two consecutive tests of the 155.98 price level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 155.81 and 155.49 can be expected.

What's on the Chart

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – projected price where Take Profit orders can be placed or profits can be taken 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 – projected price where Take Profit orders can be placed or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important: Beginner Forex traders should be extremely cautious when making market entry decisions. Ahead of major fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

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

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