Trade Analysis and Tips for Trading the Japanese Yen

Due to low market volatility, the price never reached the levels I had identified earlier.

The yen remains stuck in a range: few traders are willing to buy it, but there is also limited appetite to sell above 160 per dollar, as the Bank of Japan could intervene in the foreign exchange market at any moment.

In the second half of the day, the United States will release data on building permits and housing starts. These figures are among the key indicators of activity in the U.S. real estate sector and, consequently, have a significant impact on the overall state of the U.S. economy. They may also affect the direction of the U.S. dollar, particularly against the yen. An increase in building permits and housing starts typically signals growing confidence among developers, which could help the dollar break above the 160.50 level. If the figures come in very weak, a pullback toward 160.00 may be expected. However, only a substantial deviation from forecasts is likely to restore meaningful volatility to the USD/JPY pair.

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

Buy Signal

Scenario No. 1: I plan to buy USD/JPY today upon reaching the entry point around 160.40 (green line on the chart), with a target at 160.71 (the thicker green line on the chart). Around 160.71, I plan to exit long positions and open short positions in the opposite direction, targeting a 30–35 point move from the level. Further gains in the pair can be expected today only if U.S. data comes in strong.

Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to move higher from it.

Scenario No. 2: I also plan to buy USD/JPY today if the price tests the 160.21 level twice consecutively while the MACD indicator is in oversold territory. This would limit the pair's downward potential and trigger an upward market reversal. In this case, growth toward the opposite levels of 160.40 and 160.71 can be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY today after a break below the 160.21 level (red line on the chart), which could trigger a rapid decline in the pair. The key target for sellers will be 159.80, where I plan to exit short positions and immediately open long positions in the opposite direction, targeting a 20–25 point rebound. Pressure on the pair could return today in the event of intervention by the Bank of Japan.

Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to move lower from it.

Scenario No. 2: I also plan to sell USD/JPY today if the price tests the 160.40 level twice consecutively while the MACD indicator is in overbought territory. This would limit the pair's upward potential and trigger a downward market reversal. In this case, a decline toward the opposite levels of 160.21 and 159.80 can be expected.

Chart Notes:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated Take Profit level or an area where profits can be manually secured, as further gains above this level are unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated Take Profit level or an area where profits can be manually secured, as further declines below this level are unlikely;
• MACD Indicator – when entering the market, it is important to use overbought and oversold zones as guidance.

Important: Beginner Forex traders should exercise extreme caution when making market entry decisions. It is best to stay out of the market ahead of major fundamental reports to avoid sharp price fluctuations. If you choose to trade during news releases, always place stop-loss orders to minimize potential losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large position sizes.

Remember that successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous trading decisions based solely on current market conditions is inherently a losing strategy for an intraday trader.