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02.10.2023 09:06 AM
Analysis and trading tips for USD/JPY on October 2

Analysis of transactions and tips for trading USD/JPY

The test of 149.02, coinciding with the rise of the MACD line from zero, prompted a buy signal that led to a price increase of over 50 pips.

The Bank of Japan announced an unscheduled bond-buying operation on Friday morning, indicating its determination to slow down the yield increase. Earlier, it proposed to buy securities worth 300 billion yen, which had a significant impact on the yen's exchange rate against dollar, leading to a decline in the pair. However, throughout the day, the downward movement reversed, and today during the Asian session, USD/JPY hit a new yearly. It seems that good data on activity in Japan's non-manufacturing sector did not have any impact on the balance of power, so the pair's rise may continue in the near future. Of course, before buying at current levels, take note that the Bank of Japan plans to end its negative interest rate policy early next year, which could lead to a significant shift in market dynamics in favor of yen.

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For long positions:

Buy when the price hits 149.84 (green line on the chart) and take profit at 140.32. Growth will continue, especially after good statistics from the US.

When buying, ensure that the MACD line lies above zero or just starts to rise from it. Also consider buying USD/JPY after two consecutive price tests of 148.26, but the MACD line should be in the oversold area as only by that will the market reverse to 149.84 and 150.32.

For short positions:

Sell when the price reaches 149.26 (red line on the chart) and take profit at 148.61. Pressure will return in the event of another intervention by the central bank.

When selling, ensure that the MACD line lies below zero or drops down from it. Also consider selling USD/JPY after two consecutive price tests of 149.84, but the MACD line should be in the overbought area as only by that will the market reverse to 149.26 and 148.61.

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What's on the chart:

Thin green line - entry price at which you can buy USD/JPY

Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely.

Thin red line - entry price at which you can sell USD/JPY

Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely.

MACD line- it is important to be guided by overbought and oversold areas when entering the market

Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.

Jakub Novak,
Analytical expert of InstaForex
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