Trade Analysis and Tips for Trading the Japanese Yen

The test of the 159.24 price level occurred when the MACD indicator had already moved significantly below the zero mark, which limited the pair's downward potential. For this reason, I did not sell the dollar.

Despite the slight recovery of the yen, any deterioration in the geopolitical situation in the Middle East will bring renewed pressure on risk assets and strengthen the dollar's position. This scenario, which has already become familiar in recent times, once again demonstrates how closely global financial markets are intertwined with political developments. The yen, traditionally acting as a safe-haven currency during periods of uncertainty, may attempt to take advantage of tensions in the Middle East to strengthen. However, experience shows that the yen's strength in such situations is often outweighed by stronger demand for the U.S. dollar. Thanks to its liquidity and its status as the world's reserve currency, the U.S. currency becomes a magnet for capital seeking protection from risks.

In addition, the macroeconomic indicators expected today may also support the dollar. In particular, the release of positive data on changes in industrial production and changes in manufacturing output in the United States will serve as a clear signal of strengthening in the real sector of the economy. Growth in these indicators reflects an increase in production volumes, which directly indicates rising business activity and the country's industrial capacity.

As for the intraday strategy, I will rely more on the implementation of Scenario No. 1 and Scenario No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy USD/JPY when the price reaches the entry point around 159.36 (green line on the chart) with a target of 159.61 (thicker green line on the chart). Around 159.61, I will exit long positions and open short positions in the opposite direction, expecting a 30–35 point move from the level. The pair may rise today following strong economic data.

Important: Before buying, make sure that the MACD indicator is above the zero mark and is just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today if there are two consecutive tests of the 159.17 level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal of the market upward. Growth toward the opposite levels of 159.36 and 159.61 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell USD/JPY after the 159.17 level is broken (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 158.86, where I will exit short positions and immediately open long positions in the opposite direction, expecting a 20–25 point move from the level. Pressure on the pair may return today if very weak data is released.

Important: Before selling, make sure that the MACD indicator is below the zero mark and is just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today if there are two consecutive tests of the 159.36 level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal of the market downward. A decline toward the opposite levels of 159.17 and 158.86 can be expected.

What is shown on the chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the expected level where Take Profit orders can be placed or profits can be locked in manually, since further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the expected level where Take Profit orders can be placed or profits can be locked in manually, since further decline below this level is unlikely;
• MACD Indicator – when entering the market, it is important to consider overbought and oversold zones.

Important

Beginner traders in the Forex market should be very cautious when making decisions about entering the market. Before the release of major fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize potential losses. Without placing stop orders, you can lose your entire deposit very quickly, especially if you do not use money management and trade with large volumes.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.