Overview of trading and tips on USD/JPY

The price test of 158.91 occurred when the MACD indicator was just starting to fall from the zero mark, which confirmed a good entry point to sell the dollar. The pair continued to fall, and few doubted that after the crazy sell-off from the previous day, which was worth more than 300 pips, buyers would manage to recover. As a result, USD/JPY dropped another 150 pips. Today, the pair will likely move within the horizontal channel in the first half of the day, so buyers can achieve some correction. However, everything will depend on Federal Reserve Chief Jerome Powell's speech, which we will hear during the U.S. session. Traders priced in about a 90% chance of a rate cut in September, and if Powell confirms this, the dollar may fall even more, as this will no longer provide such profits on carry trade deals with the Japanese yen. As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and 2.

Buy signals

Scenario No. 1. Today, I plan to buy USD/JPY when the price reaches the entry point around 158.51 plotted by the green line on the chart, aiming for growth to 159.33 plotted by the thicker green line on the chart. Around 159.33, I'm going to exit long positions and open short ones in the opposite direction, expecting a movement of 30-35 pips in the opposite direction from that level. You can count on the pair to rise today as part of a bullish correction. Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.

Scenario No. 2. I also plan to buy USD/JPY today in case of two consecutive tests of 157.87 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reverse market upturn. One can expect growth to the opposite levels of 158.51 and 159.33.

Sell signals

Scenario No. 1. I plan to sell USD/JPY today only after testing the level of 157.87 plotted by the red line on the chart, which will lead to a rapid decline in the price. The key target for sellers will be 157.10, where I am going to exit short positions and immediately open long ones in the opposite direction, expecting a movement of 20-25 pips in the opposite direction from that level. Pressure on USD/JPY may return at any moment, especially in case the price fails to consolidate around the intraday high. Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.

Scenario No. 2. I also plan to sell USD/JPY today in case of two consecutive price tests at 158.51 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse market downturn. One can expect a decline to the opposite levels 157.87 and 157.10.

What's on the chart:

The thin green line is the entry price at which you can buy the trading instrument.

The thick green line is the estimated price where you can set Take-Profit (TP) or manually close positions, as further growth above this level is unlikely.

The thin red line is the entry price at which you can sell the trading instrument.

The thick red line is the price where you can set Take-Profit (TP) or manually close positions, 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 in the forex market need to be very careful when making decisions to enter the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade in large volumes.

And remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I presented above. Spontaneously making trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.