FX.co ★ Analysis and trading tips for USD/JPY on August 31

Analysis of transactions and tips for trading USD/JPY

Further growth became limited because the first test of 146.49 coincided with the sharp rise of the MACD line from zero. The second test, on the other hand, happened when the MACD went in the overbought area, clearly an indication to sell. This resulted in a price decrease of over 30 pips. When weak US data came out, the pair broke the level of 146.17, but the MACD line already moved past zero. As for buying on the rebound from 145.66, it led to a 40-pip price increase.

Pressure on dollar increased as retail trade volume in Japan came out much better than expected. With regards to the upcoming US statistics, persisting price pressure and rise in the expenditure index will likely regain dollar demand, leading to a new wave of growth for USD/JPY. The data on unemployment claims will not affect the market's direction significantly.

For long positions:

Buy when the price hits 146.15 (green line on the chart) and take profit at 146.56. Growth will occur amid strong inflation growth in the US. However, 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 145.88, but the MACD line should be in the oversold area as only by that will the market reverse to 146.15 and 146.56.

For short positions:

Sell when the price reaches 145.88 (red line on the chart) and take profit at 145.47. Pressure will return if price pressure decreases in the US. However, when selling, traders must ensure that the MACD line lies below zero or drops down from it.

Also consider selling USD/JPY after two consecutive price tests of 146.15, but the MACD line should be in the overbought area as only by that will the market reverse to 145.88 and 145.47.

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.