Trade Analysis and Tips for Trading the Japanese Yen

The test of the 159.74 level occurred when the MACD indicator had already moved significantly above the zero line, which limited the dollar's upward potential. For this reason, I did not buy and missed the entire upward move.

In the second half of the day, data on the University of Michigan Consumer Sentiment Index and inflation expectations are expected. In addition, speeches by FOMC representatives Thomas Barkin and Mary Daly will take place. A combination of strong economic data and hawkish rhetoric from monetary policymakers may support further growth in the dollar.

Statements from Federal Reserve officials may provide insight into their current assessment of inflationary pressure, which has likely increased following the U.S. attack on Iran. If their tone reflects a hawkish stance, this will strengthen expectations of maintaining high interest rates or even raising them further, which would lead to a stronger dollar and a weaker Japanese yen.

As for the intraday strategy, I will mainly rely on implementing scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy USD/JPY today upon reaching the entry point around 159.91 (green line on the chart), with a target of 160.30 (thicker green line on the chart). Around 160.30, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point move). Growth in the pair today can be expected in the case of strong U.S. data.Important! Before buying, make sure the MACD indicator is above the zero line and just beginning to rise.

Scenario No. 2: I also plan to buy USD/JPY today in the case of two consecutive tests of the 159.78 level when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward reversal. Growth toward the opposite levels of 159.91 and 160.30 can be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY today after a break below the 159.78 level (red line on the chart), which may lead to a rapid decline. The key target for sellers will be 159.52, where I plan to exit short positions and also open long positions in the opposite direction (expecting a 20–25 point move). Pressure on the pair may return at any moment.Important! Before selling, make sure the MACD indicator is below the zero line and just beginning to decline.

Scenario No. 2: I also plan to sell USD/JPY today in the case of two consecutive tests of the 159.91 level when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 159.78 and 159.52 can be expected.

What's on the chart:

• Thin green line – entry price at which you can buy the trading instrument;
• Thick green line – estimated level where you can set Take Profit or lock in profits, as further growth above this level is unlikely;
• Thin red line – entry price at which you can sell the trading instrument;
• Thick red line – estimated level where you can set Take Profit or lock in profits, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important

Beginner Forex traders should be very cautious when making market entry decisions. Before the release of important 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-loss orders to minimize losses. Without stop-loss orders, you can quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

Remember, successful trading requires a clear trading plan, like the one outlined above. Spontaneous trading decisions based on current market conditions are generally a losing strategy for intraday traders.