Trade analysis and tips for trading the Japanese yen

The test of the 158.86 level occurred when the MACD indicator had just started moving downward from the zero line, confirming a valid entry point for selling the dollar. As a result, the pair declined by 20 points.

In the second half of the day, important economic data is expected, including the Empire Manufacturing Index and the NAHB Housing Market Index. In addition, speeches by Federal Open Market Committee (FOMC) members Michael S. Barr and Michelle Bowman are scheduled. From their statements, market participants hope to gain further insight into the central bank's views on the current economic situation and future monetary policy direction amid the military conflict in the Middle East. Their comments may provide clues about potential Federal Reserve decisions, including interest rate changes, which directly affect market expectations and the dynamics of financial assets. Any signals indicating changes in Fed policy could significantly impact the direction of the currency market.

As for the intraday strategy, I will rely more on scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy USD/JPY today upon reaching the entry point around 159.05 (green line on the chart), with a target at 159.45 (thicker green line). Around 159.45, I plan to exit long positions and open short positions in the opposite direction (expecting a 30–35 point move). Growth in the pair today can be expected with strong economic data.Important: Before buying, make sure the MACD indicator is above the zero line and just beginning to rise.

Scenario No. 2: I also plan to buy USD/JPY if there are two consecutive tests of the 158.79 level while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward reversal. Growth toward 159.05 and 159.45 can be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY after a break of the 158.79 level (red line on the chart), which would lead to a quick decline. The key target for sellers will be 158.39, where I plan to exit short positions and open long positions in the opposite direction (expecting a 20–25 point rebound). Pressure on the pair will return today with weak data.Important: Before selling, make sure the MACD indicator is below the zero line and just beginning to decline.

Scenario No. 2: I also plan to sell USD/JPY if there are two consecutive tests of the 159.05 level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward reversal. A decline toward 158.79 and 158.39 can be expected.

Chart Notes:

• Thin green line – entry price for buying;
• Thick green line – estimated Take Profit level or area to lock in profits, as further growth above this level is unlikely;
• Thin red line – entry price for selling;
• Thick red line – estimated Take Profit level or area to lock in profits, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important: Beginner Forex traders should be very cautious when making market entry decisions. Before the release of major fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. 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 with large volumes.

Remember that successful trading requires a clear trading plan, like the one outlined above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for an intraday trader.