Analysis of Trades and Trading Advice for the Japanese Yen

The price test of 159.34 occurred when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential. For this reason, I did not buy the dollar.

The market is moving slowly today, but it remains tilted in favor of US dollar buyers. In the second half of the day, the only releases likely to stir the market are US existing home sales and the NFIB Small Business Optimism Index. Existing home sales reflect the condition of the housing sector, while the NFIB index shows the confidence of small businesses. Strong figures could strengthen the dollar by increasing expectations regarding the Fed's interest rate. Nevertheless, both indicators are considered secondary, so a strong market move in response to them is unlikely. For the yen, continued dollar strength means that USD/JPY may remain at elevated levels, especially since the Bank of Japan continues to pursue a much more cautious policy than the Fed. This divergence in policy approaches remains the main burden on the Japanese currency.

As for the intraday strategy, I will focus more on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today when the entry point is reached around 159.41 (the green line on the chart), with a target of 159.81 (the thicker green line on the chart). Around 159.81, I will close the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. A rise in the pair can be expected today, but the potential is rather limited. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY today if the price tests 159.19 twice consecutively while the MACD indicator is in the oversold area. This would limit the pair's downward potential and lead to a reversal to the upside. A rise toward the opposite levels of 159.41 and 159.81 can be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY today after the 159.19 level is broken (the red line on the chart), which could lead to a rapid decline in the pair. The key target for sellers will be 158.67, where I will close the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Downward pressure on the pair will return if the central bank intervenes. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario #2: I also plan to sell USD/JPY today if the price tests 159.41 twice consecutively while the MACD indicator is in the overbought area. This would limit the pair's upward potential and lead to a reversal to the downside. A decline toward the opposite levels of 159.19 and 158.67 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 price at which Take Profit can be placed or profits can be taken manually, as 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 price at which Take Profit can be placed or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take overbought and oversold areas into account.

Important. Beginner Forex traders should be extremely cautious when making decisions about entering the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp exchange-rate fluctuations. If you decide to trade during news releases, always use stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade with large position sizes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is fundamentally a losing strategy for an intraday trader.