Trade Analysis and Tips for Trading the Japanese Yen

The price test at 162.64 coincided with the MACD indicator moving significantly above the zero mark, limiting the pair's upward potential. For this reason, I did not buy the dollar.

Yesterday's division of views within the Federal Reserve regarding the future trajectory of interest rates led to a slight weakening of the US dollar against the yen. Although several officials explicitly stated that they already see grounds for tightening and would allow a rate hike if inflation remains high, most favored a more cautious approach to policy. Also, there were market talks about the Bank of Japan potentially accelerating the pace of interest rate hikes and ultimately raising the key rate above 2% to tame inflation. This also positively affects yen quotes, which have recently traded near multi-year lows against the US dollar. However, without direct intervention from the central bank, we can expect a larger wave of USD/JPY declines.

Regarding the intraday strategy, I will focus more on implementing scenarios #1 and #2.

Buy Scenarios

Scenario #1: I plan to buy USD/JPY today at an entry point around 162.47 (green line on the chart), targeting a move to 162.84 (thicker green line on the chart). Around 162.84, I plan to exit my long positions and open short positions in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). It is best to return to longs in the pair during corrections and significant dips in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY today in the case of two consecutive tests of the price 162.28 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. A rise to the opposing levels of 162.47 and 162.84 is expected.

Sell Scenarios

Scenario #1: I plan to sell USD/JPY today only after breaking the level of 162.28 (red line on the chart), which will lead to a quick decline in the pair. The key target for sellers will be 161.93, where I plan to exit my shorts and immediately buy in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Sellers can return at any moment; just any hint from the central bank is needed. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning its decline from it.

Scenario #2: I also plan to sell USD/JPY today in the case of two consecutive tests of the price 162.47 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decrease to the opposite levels of 162.28 and 161.93 can be expected.

What the Chart Shows:

• The thin green line represents the entry price for buying the trading instrument;
• The thick green line is the estimated price at which to set Take Profit or lock in profits, as further upward movement is unlikely above this level;
• The thin red line is the entry price for selling the trading instrument;
• The thick red line is the estimated price at which to set Take Profit or lock in profits, as further downward movement is unlikely below this level;
• The MACD indicator. It is important to base market entries on overbought and oversold zones.

Important: Beginning traders in the Forex market must make entry decisions very cautiously. Before the release of significant fundamental reports, it is best to stay out of the market to avoid sudden price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I have presented above. Making spontaneous trading decisions based on the current market situation is fundamentally a losing strategy for intraday traders.