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20.12.202410:01 Forex Analysis & Reviews: USD/JPY: Simple Trading Tips for Beginner Traders on December 20. Forex Analysis of Yesterday's Trades

Relevancia 02:00 2024-12-21 UTC--5

Analysis of Trades and Trading Tips for the Japanese Yen

A test of the 157.12 level coincided with the MACD indicator beginning to move upward from the zero mark, confirming a proper entry point for buying the dollar. As a result, the pair rose by more than 40 pips.

Today's data on Japan's Consumer Price Index led to renewed demand for the yen, weakening the U.S. dollar's position. However, it is still too early to say that the USD/JPY pair has lost bullish momentum.

Signs of rising inflation could lead to potential changes in the Bank of Japan's monetary policy. Sustained growth in consumer prices may push the central bank to reconsider its stance on ultra-loose monetary policy, making the yen a more attractive investment. According to the latest data, inflation in Japan increased to 2.9%, indicating that the economy is beginning to recover from negative impacts, which inspires optimism among both local and foreign investors. The strengthening yen also reflects growing interest in safe-haven assets.

I will primarily focus on executing Scenario #1 and Scenario #2 regarding intraday strategy.

Exchange Rates 20.12.2024 analysis

Buy Signal

Scenario #1: I plan to buy USD/JPY today when the entry point reaches the 157.38 level (green line on the chart), targeting growth to the 158.22 level (thicker green line). Around 158.22, I plan to exit purchases and open sales in the opposite direction (expecting a movement of 30–35 pips in the opposite direction from the level). It is best to focus on further pair growth and buy during corrections.

Important! Before buying, ensure the MACD indicator is above the zero mark and beginning its upward movement.

Scenario #2: I also plan to buy USD/JPY today in case of two consecutive tests of the 156.83 level when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. Growth to the opposite levels of 157.38 and 158.22 can be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY today only after the 156.83 level is breached (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 156.04, where I plan to exit sales and immediately open purchases in the opposite direction (expecting a movement of 20–25 pips in the opposite direction from the level). Pressure on the pair is unlikely to return today.

Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning its downward movement.

Scenario #2: I also plan to sell USD/JPY today in case of two consecutive tests of the 157.38 level at a time when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. A decline to the opposite levels of 156.83 and 156.04 can be expected.

Exchange Rates 20.12.2024 analysis

Chart Notes

  • Thin green line: Entry price for buying the trading instrument.
  • Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
  • Thin red line: Entry price for selling the trading instrument.
  • Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
  • MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.

Important Note for Beginner Traders

  • Always approach market entry decisions cautiously.
  • Avoid trading during major news releases to sidestep volatile price swings.
  • If trading during news releases, always set stop-loss orders to minimize losses.
  • Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.
  • A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous 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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