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16.12.202416:47 Forex Analysis & Reviews: USD/JPY: Simple Trading Tips for Beginner Traders on December 16th (U.S. Session)

Review of Trades and Trading Tips for USD/JPY

The first test of the 153.59 price level occurred when the MACD indicator had moved significantly below the zero line, limiting the pair's bearish potential. For this reason, I refrained from selling the dollar. Shortly after, another test of 153.59 occurred, with the MACD indicator in the oversold area. This allowed Scenario #2 for buying to materialize, resulting in the pair rising by nearly 30 points.

Key US economic data such as the Manufacturing PMI, Services PMI, and Composite PMI will influence the USD/JPY pair's direction. The Manufacturing PMI measures activity in manufacturing companies, while the Services PMI evaluates trends in the services sector. These indicators help traders assess the overall state of the economy and anticipate its trajectory. A sharp decline, especially in manufacturing, could lead to a significant drop in the pair. Conversely, decent data would likely extend USD/JPY's uptrend, so exercise caution with selling.

For intraday strategies, I will focus on implementing Scenario #1 and Scenario #2.

Exchange Rates 16.12.2024 analysis

Buy Signal

Scenario #1: Today, I plan to buy USD/JPY at the entry point near 153.91 (green line on the chart), targeting a rise to the 154.40 level (thicker green line on the chart). At 154.40, I plan to exit purchases and open sales in the opposite direction, expecting a 30–35 point pullback. The pair's uptrend could continue.Important! Before buying, ensure the MACD indicator is above the zero line and just starting its upward movement.

Scenario #2: I also plan to buy USD/JPY if there are two consecutive tests of the 153.63 price level, when the MACD indicator is in the oversold area. This will limit the pair's bearish potential and lead to a market reversal upward. Growth can be expected toward the opposite levels of 153.91 and 154.40.

Sell Signal

Scenario #1: I plan to sell USD/JPY after a breakdown of the 153.63 level (red line on the chart), which could lead to a rapid decline in the pair. The key target for sellers will be 153.11, where I plan to exit sales and immediately open purchases in the opposite direction, expecting a 20–25 point rebound. Renewed pressure on the dollar will likely only follow weak US data.Important! Before selling, ensure the MACD indicator is below the zero line and just starting its downward movement.

Scenario #2: I also plan to sell USD/JPY if there are two consecutive tests of the 153.91 price level, when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline can be expected toward the opposite levels of 153.63 and 153.11.

Exchange Rates 16.12.2024 analysis

Chart Notes

  • Thin green line: Entry price for buying the trading instrument.
  • Thick green line: Estimated price for setting Take Profit or manually fixing profit, as further growth above this level is unlikely.
  • Thin red line: Entry price for selling the trading instrument.
  • Thick red line: Estimated price for setting Take Profit or manually fixing profit, as further decline below this level is unlikely.
  • MACD Indicator: When entering the market, it's important to consider overbought and oversold areas.

Important Notes for Beginner Forex Traders

  • Carefully decide when to enter the market. Before the release of major fundamental reports, it's best to stay out of the market to avoid sharp price swings.
  • If you choose to trade during news releases, always set stop-loss orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially when trading large volumes without proper money management.
  • Remember, successful trading requires a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Jakub Novak,
Analytical expert of InstaSpot
© 2007-2024
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