FX.co ★ Analysis and trading tips for USD/JPY on October 16

Analysis of transactions and tips for trading USD/JPY

The test of 149.65, coinciding with the downward movement of the MACD line from zero, prompted a sell signal that led to a price increase of around 20 pips.

The decline from the psychological level of 150 and the intervention of the Bank of Japan hampered dollar demand. However, the released US statistics left room for a potential rebound within this range. As for today, weak data on industrial production in Japan further weakened yen's position, but not much economic data lies ahead, so trading may remain within a sideways channel, with new attempts by buyers to break through the 150 level. Watch out for the Empire Manufacturing Index and the speech by FOMC member Patrick T. Harker.

For long positions:

Buy when the price hits 149.62 (green line on the chart) and take profit at 149.96. Growth will occur in continuation of the bull market, supported by strong data from 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 149.38, but the MACD line should be in the oversold area as only by that will the market reverse to 149.62 and 149.96.

For short positions:

Sell when the price reaches 149.38 (red line on the chart) and take profit at 149.02. Pressure will return in the case of central bank intervention. However, 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 149.62, but the MACD line should be in the overbought area as only by that will the market reverse to 149.38 and 149.02.

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.