Trade Analysis and Tips for Trading the Japanese Yen

The price test at 153.58 coincided with the MACD indicator moving significantly below the zero line, which, in my view, limited the pair's bearish potential. For this reason, I did not sell the dollar.

The Japanese yen faced active selling again today after Prime Minister Sanae Takaichi stated that the government's goal of achieving a primary budget surplus, which is part of fiscal consolidation, will no longer be reviewed on an annual basis. The strategy will be revised with the aim of achieving balance over the coming years. Takaichi also indicated that the economic policy would now be more accommodative and aimed at stimulating economic growth.

The market perceived this shift in policy as a departure from strict austerity measures, potentially leading to increased government spending and further increases in Japan's national debt. Concerns about debt sustainability and a potential downgrade of the country's credit rating also contributed to yen selling. The impact on the Bank of Japan remains uncertain. On one hand, the BoJ may feel less pressure to tighten monetary policy. On the other hand, a weakening yen could force the BoJ to take action to prevent excessive depreciation and associated inflation risks.

As for the intraday strategy, I will primarily rely on the implementation of scenarios #1 and #2.

Buy Scenarios

Scenario #1: I plan to buy USD/JPY today if the price reaches an entry point around 153.60 (green line on the chart), targeting a rise to 154.25 (thicker green line on the chart). At the 154.25 level, I intend to exit my long positions and open shorts in the opposite direction (aiming for a 30-35-pip move). It is best to resume buying the pair during corrections and significant pullbacks in USD/JPY. Important: Before buying, ensure the MACD indicator is above the zero line and is just beginning an upward move.

Scenario #2: I also plan to buy USD/JPY today if the price tests 153.27 twice while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. We can expect a rise to the opposite levels of 153.60 and 154.25.

Sell Scenarios

Scenario #1: I plan to sell USD/JPY today only after it breaches 153.27 (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 152.75 level, where I intend to exit my shorts and simultaneously open longs in the opposite direction (aiming for a move of 20-25 pips in the opposite direction from the level). It is best to sell as high as possible. Important: Before selling, ensure the MACD indicator is below the zero line and just beginning its downward movement.

Scenario #2: I also plan to sell USD/JPY today if the price tests 153.60 twice while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. We can expect a decline to the opposite levels of 153.27 and 152.75.

What the Chart Shows:

• Thin Green Line: Entry price for buying the trading instrument.
• Thick Green Line: Estimated price where Take Profit can be set or where profit can be secured, as further increases above this level are unlikely.
• Thin Red Line: Entry price for selling the trading instrument.
• Thick Red Line: Estimated price where Take Profit can be set or where profit can be secured, as further decreases below this level are unlikely.
• MACD Indicator: When entering the market, it is important to be guided by the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making trading entry decisions. It is best to remain out of the market before the release of important fundamental reports to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember that successful trading requires having a clear trading plan, similar to the one I presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.