Analysis of Trades and Tips for Trading the Japanese Yen

The test of the 157.80 price level earlier today coincided with the MACD indicator significantly above the zero line, limiting the pair's upward potential. For this reason, I decided not to buy the dollar. After a sharp decline in the pair, the test of the 157.42 price level aligned with the MACD beginning its downward movement from the zero line, confirming a proper entry point for selling the dollar, which led to a decline to the target level of 156.97.

During the American session, important U.S. Services PMI data and a speech by FOMC member Lisa D. Cook are expected. A hawkish tone from Cook may support the growth of USD/JPY, whereas a dovish position would highlight the narrowing gap between the monetary policies of the U.S. and Japan, further weakening the dollar in line with the morning trend. Regarding intraday strategies, I will rely more on implementing Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: Buy USD/JPY today near the 157.39 level (green line on the chart), targeting a rise to 157.81 (thicker green line on the chart). At 157.81, I plan to exit long positions and open sell trades for a pullback of 30–35 points. Pair growth can be anticipated following a hawkish Fed stance.Important: Before buying, ensure the MACD indicator is above the zero line and just starting its upward movement.

Scenario #2: Buy USD/JPY today after two consecutive tests of the 156.79 level when the MACD is in the oversold zone. This will cap the pair's downward potential and likely reverse the market upward. Targets would be 157.39 and 157.81.

Sell Signal

Scenario #1: Sell USD/JPY today after the 156.79 level is breached (red line on the chart), which would trigger a rapid decline in the pair. Sellers' key target will be 156.32, where I plan to exit short positions and immediately open long trades for a 20–25-point rebound. Renewed downward pressure may follow a dovish tone from Cook.Important: Before selling, ensure the MACD indicator is below the zero line and just beginning its downward movement.

Scenario #2: Sell USD/JPY today after two consecutive tests of the 157.39 level when the MACD is in the overbought zone. This will cap the pair's upward potential and likely reverse the market downward. Expect a decline toward 156.79 and 156.32.

Chart Details:

• Thin Green Line: Entry price for buying the trading instrument.
• Thick Green Line: Target price for Take Profit or manual profit-taking, as further growth above this level is unlikely.
• Thin Red Line: Entry price for selling the trading instrument.
• Thick Red Line: Target price for Take Profit or manual profit-taking, as further declines below this level are unlikely.
• MACD Indicator: Overbought and oversold zones guide entry decisions.

Important Notes for Beginner Forex Traders:

• Exercise caution when deciding to enter the market. It is advisable to stay out of the market before the release of critical fundamental reports to avoid sharp price movements.
• If trading during news releases, always use stop-loss orders to minimize losses. Trading without stop-loss orders may quickly deplete your account balance, especially when trading large volumes without proper money management.
• Successful trading requires a clear plan, as illustrated above. Making spontaneous decisions based on the current market situation is inherently a losing strategy for intraday traders.