USD/JPY: Tips for Beginner Traders for October 22nd (U.S. Session)

[Ben Graham]

Trade Review and Recommendations for Trading the Japanese Yen

The price test of 151.72 in the first half of the day occurred when the MACD indicator had just started moving downward from the zero line, confirming the correct entry point for selling the dollar — however, a major decline in the pair did not follow.

From here, much will depend on the speech by FOMC member Michael S. Barr. If Barr avoids commenting on future policy prospects, pressure on the yen will likely resume. The Japanese currency is highly sensitive to the monetary policy divergence between Japan and the U.S. Given that the Bank of Japan is limited in its ability to raise interest rates due to the stance of Japan's new Prime Minister — even despite the Federal Reserve's relatively dovish tone — the yen is expected to remain under pressure against the dollar. If Barr's remarks are neutral and provide no clear signals regarding the future path of U.S. interest rates, the market may interpret this as supportive for the U.S. dollar.

As for intraday trading strategy, I will mainly rely on Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today near the entry point of 151.88 (green line on the chart) with a target at 152.47 (thicker green line). Around 152.47, I intend to exit long positions and open shorts in the opposite direction, expecting a 30–35-point pullback. The pair may continue to rise further within the framework of a new uptrend.

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

Scenario #2: I also plan to buy USD/JPY if the price tests 151.64 twice, while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger a reversal upward. Growth toward the opposite levels of 151.88 and 152.47 can then be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY after a breakout below 151.64 (red line on the chart), which would likely trigger a rapid decline in the pair. The key target for sellers will be 151.14, where I plan to exit short positions and immediately open buys in the opposite direction, expecting a 20–25-point rebound. Strong downward pressure on the pair today seems unlikely.Important: Before selling, make sure the MACD indicator is below the zero line and just starting to move downward.

Scenario #2: I also plan to sell USD/JPY if the price tests 151.88 twice, while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and likely trigger a reversal downward, with targets at 151.64 and 151.14.

Chart Legend

• Thin green line – entry price for buying the trading instrument.
• Thick green line – suggested price for setting Take Profit or manually taking profit, as further growth above this level is unlikely.
• Thin red line – entry price for selling the trading instrument.
• Thick red line – suggested price for setting Take Profit or manually taking profit, as further decline below this level is unlikely.
• MACD indicator – when entering the market, focus on overbought and oversold zones.

Important Note for Beginner Forex Traders

Beginner traders in the Forex market should make entry decisions very carefully. Before the release of major fundamental reports, it is best to stay out of the market to avoid sharp exchange rate swings. If you decide to trade during news releases, always set stop-loss orders to minimize losses. Without stop-loss protection, you can quickly lose your entire deposit — especially if you neglect money management and trade with large volumes.

And remember: successful trading requires a clear, structured plan, like the one presented above. Spontaneous trading decisions based on current market movements are a losing strategy for intraday traders.

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