Trade Breakdown and Trading Tips for the Japanese Yen

The test of the 156.13 price level occurred when the MACD indicator was just beginning to move up from the zero line, which confirmed a correct entry point for buying the dollar. As a result, the pair rose by more than 60 points.

Comments from the head of the Bank of Japan regarding further interest rate hikes diverged from market expectations, which triggered this reaction. In the second half of the day, the key focus will be the release of U.S. existing home sales data, as well as the University of Michigan's consumer sentiment index and inflation expectations. These figures will serve as an important barometer of the state of the U.S. economy and consumer confidence. If existing home sales increase, the U.S. dollar is likely to continue rising.

The University of Michigan Consumer Sentiment Index will show how Americans assess the current economic environment and what they expect going forward. This index, along with inflation expectations data, is of significant importance to the Federal Reserve, which takes it into account when making monetary policy decisions. Elevated inflation expectations could prompt the Fed to adopt a more cautious stance, which would be positive for the dollar and negative for the yen.

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 upon reaching the entry point around 157.49 (green line on the chart), targeting a rise to the 158.44 level (the thicker green line on the chart). Around 158.44, I plan to exit long positions and open sell positions in the opposite direction (targeting a 30–35 point move in the opposite direction from that level). Further gains in the pair can be expected in line with the prevailing trend.Important: Before buying, make sure 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 156.96 level while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth can be expected toward the opposite levels of 157.49 and 158.44.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY today after an update of the 156.96 level (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be the 156.30 level, where I plan to exit sell positions and immediately open buy positions in the opposite direction (targeting a 20–25 point move in the opposite direction from that level). Pressure on the pair is unlikely to return today. Important: Before selling, make sure the MACD indicator is below the zero line and is just beginning to fall from it.

Scenario No. 2: I also plan to sell USD/JPY today in the case of two consecutive tests of the 157.49 level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 156.96 and 156.30 can be expected.

What's on the Chart:

• Thin green line – entry price at which the instrument can be bought;
• Thick green line – estimated price where Take Profit can be set or profits can be manually locked in, as further growth above this level is unlikely;
• Thin red line – entry price at which the instrument can be sold;
• Thick red line – estimated price where Take Profit can be set or profits can be manually locked in, 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 must be extremely cautious when making market entry decisions. Ahead of major fundamental reports, it is best to stay out of the market to avoid being caught in sharp price swings. 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.

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