Trade Analysis and Tips for Trading the Japanese Yen

The price test at 153.37 coincided with the MACD indicator just beginning to move downward from the zero mark, confirming the correct entry point for selling the dollar. As a result, the pair decreased by 20 pips.

The Japanese yen overlooked the sharp decline in the University of Michigan's consumer sentiment index, which fell to 50.3 points, and continued to show weakness against the U.S. dollar, preventing a significant sell-off in USD/JPY last Friday. This paradoxical scenario is caused by several interconnected factors that outweigh the impact of U.S. macroeconomic data on the yen's dynamics. Primarily, the key role is played by the difference in monetary policy between the U.S. Federal Reserve and the Bank of Japan. While the Fed plans to adopt a wait-and-see approach to combat inflation, the BoJ continues to maintain a loose monetary policy, promising only to raise interest rates at some point in the future.

Today's data on Japan's leading economic indicators had no impact on the USD/JPY pair, allowing the dollar to maintain its leadership. The market seemed to ignore the positive signals from the Japanese economy, focusing instead on broader global factors driving the dollar upward. This is due to increasing expectations regarding further tight monetary policy from the U.S. Federal Reserve.

Regarding the intraday strategy, I will be focusing more on implementing Scenarios 1 and 2.

Buy Scenarios

• Scenario 1: I plan to buy USD/JPY today upon reaching an entry point around 154.10 (green line on the chart), with a target for growth to 154.55 (thicker green line on the chart). At the level of 154.55, I intend to exit my long positions and open shorts in the opposite direction (aiming for a movement of 30-35 pips from the level). It is best to return to buying the pair on corrections and significant dips in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and just starting to rise from there.
• Scenario 2: I also plan to buy USD/JPY today in case the price tests 153.81 twice while the MACD is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. A rise to the opposing levels of 154.10 and 154.55 can be expected.

Sell Scenarios

• Scenario 1: I plan to sell USD/JPY today only after it breaks the 153.81 level (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 153.39 level, where I plan to exit my shorts and immediately buy back (aiming for a move of 20-25 pips in the opposite direction from the level). It is better to sell as high as possible. Important! Before selling, ensure that the MACD indicator is below the zero mark and just starting to decline from there.
• Scenario 2: I also plan to sell USD/JPY today if the price tests 154.10 twice, with the MACD indicator in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. A decline to the opposing levels of 153.81 and 153.39 can be anticipated.

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.