Trade Analysis and Tips for Trading the Japanese Yen

The levels I marked were not tested during the first half of the day.

Going forward, special attention will be paid to U.S. non-farm employment statistics. An increase in the number of jobs usually indicates stronger business activity and improvements in the labor market. Economists expect faster growth in February than in January of this year. If the indicator disappoints, pressure on the pair will quickly return.

At the same time, unemployment rate data will also be released. Changes in this indicator directly affect household purchasing power and the overall economic outlook. A decline in unemployment usually means that more people are receiving stable incomes, which stimulates consumer demand and investment activity.

Market participants will also closely watch statements from two members of the Federal Open Market Committee (FOMC) — Mary Daly and Beth M. Hammack. Comments from central bank representatives can significantly influence market expectations and, consequently, the movement of financial instruments.

Particular importance will be placed on comparing these speeches with the latest published economic data. If employment and unemployment reports exceed or fall short of forecasts, FOMC members will likely comment on these figures, explaining how they may affect their risk assessments and interest-rate decisions. In the current environment of geopolitical uncertainty, every statement by Federal Reserve officials carries increased significance.

As for the intraday strategy, I will mainly rely 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 158.10 (the green line on the chart), with a target rise to 158.81 (the thicker green line on the chart). Around 158.81, I plan to exit long positions and open short positions in the opposite direction (expecting a 30–35 point move from the level). A rise in the pair today can be expected after strong economic data.

Important: Before buying, make sure that the MACD indicator is above the zero line and 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 price 157.70 while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the levels 158.10 and 158.81 can then be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY today after the 157.70 level is broken (red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 156.98, where I plan to exit short positions and immediately open long positions in the opposite direction (expecting a 20–25 point rebound from that level). Pressure on the pair will return if the reports come out weak.

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

Scenario No. 2: I will also sell USD/JPY today if there are two consecutive tests of the price 158.10 while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward 157.70 and 156.98 can then be expected.

What the Chart Shows

• Thin green line – the entry price at which you can buy the trading instrument.
• Thick green line – the estimated level where you can place Take Profit or manually lock in profits, since further growth above this level is unlikely.
• Thin red line – the entry price at which you can sell the trading instrument.
• Thick red line – the estimated level where you can place Take Profit or lock in profits, 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 make entry decisions very carefully. Before the release of major fundamental reports, it is best to stay out of the market to avoid sharp exchange-rate fluctuations.

If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can very quickly lose your entire deposit—especially if you do not use money management and trade with large volumes.

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