Trade Analysis and Tips for Trading the Japanese Yen

The test of the 154.35 price level occurred at a moment when the MACD indicator was just beginning to move downward from the zero line, which confirmed a correct entry point for selling the dollar. As a result, the pair declined toward the target level of 153.57.

At present, traders are confused, as data from Japan did not provide clear indications that authorities once again intervened in the Tokyo market by purchasing the yen. The relatively small discrepancy between the Bank of Japan's current account data published on Monday and financial brokers' forecasts makes it difficult to conclude that authorities intervened in the market. Meanwhile, the yen continues to fluctuate sharply, indicating market nervousness. Going forward, special attention will be focused on statements from representatives of the Japanese government and the Bank of Japan. Any remark, even the slightest, may be interpreted by the market as a hint of upcoming action.

In addition, during the U.S. trading session, the release of U.S. employment data and the consumer sentiment indicator will be of particular importance. Analysts will closely examine the ADP figures, seeking signs of stability or, conversely, weakening in the labor market. Consumer confidence is another significant factor that can influence dollar dynamics. As a rule, a high level of consumer confidence reflects households' willingness to spend, stimulating economic growth and supporting a stronger dollar. In turn, declining confidence may lead to reduced spending, which would negatively affect the economy and weaken the currency.

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

Buy Signal

Scenario No. 1: Today, I plan to buy USD/JPY when the price reaches the entry level around 154.13 (green line on the chart), with a growth target at 154.79 (the thicker green line on the chart). Around 154.79, I will exit long positions and open short positions in the opposite direction (expecting a move of 30–35 points in the opposite direction from this level). It is unlikely that strong growth in the pair can be expected today.Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in the case of two consecutive tests of the 153.45 price level while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 154.13 and 154.79 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell USD/JPY after an update of the 153.45 level (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 152.55 level, where I will exit short positions and immediately open long positions in the opposite direction (expecting a move of 20–25 points in the opposite direction from this level). Pressure on the pair is expected to persist until the end of the day.Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today in the case of two consecutive tests of the 154.13 price level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 153.45 and 152.55 can be expected.

What's on the Chart:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated price where Take Profit can be set or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated price where Take Profit can be set or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to focus on 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 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 large volumes.

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