Analysis of Trades and Trading Tips for the Japanese Yen

The test of the 144.79 level occurred at a time when the MACD indicator had already moved significantly above the zero line, which limited the pair's upside potential. Therefore, I did not buy the dollar and missed the entire move.

Today's news of a rise in Japan's unemployment rate triggered another sell-off in the yen against the dollar. Japan's monetary base data is also disappointing. Investors quickly dumped the yen, fearing further economic weakness and potential intervention by the Bank of Japan.

The market reacted instantly: USD/JPY jumped, breaking through key resistance levels. This reaction is likely tied to increasing concerns about Japan's economic outlook. Economists link the rise in unemployment to several factors, including an aging population, declining industrial competitiveness, and global economic uncertainty.

USD/JPY's next direction will be determined by upcoming U.S. labor market data, expected in the second half of the day. As a result, the European session may remain relatively quiet.

For intraday strategy, I will focus primarily on implementing Scenarios #1 and #2.

Buy Scenario

Scenario #1: I plan to buy USD/JPY today upon reaching the entry point at 145.61 (green line on the chart), targeting a rise to 146.56 (thicker green line). Around 146.56, I plan to exit the long position and open a short position, expecting a 30–35 pip move in the opposite direction. The best entry points for buying this pair are during pullbacks or significant corrections.

Important: Before buying, ensure the MACD indicator is above the zero line and starting to rise.

Scenario #2: I also plan to buy USD/JPY if the 145.05 level is tested twice in a row while the MACD is in the oversold zone. This would limit the pair's downside potential and could trigger a bullish reversal. A rise toward 145.61 and 146.56 is expected.

Sell Scenario

Scenario #1: I will sell USD/JPY only after a confirmed break below 145.05 (red line), which could lead to a sharp decline. The primary target will be 144.32, where I plan to exit the short and open a long position, expecting a 20–25 pip bounce. Selling pressure is expected to reemerge only if U.S. economic data fails to meet expectations.

Important: Before selling, ensure the MACD indicator is below the zero line and beginning to fall.

Scenario #2: I also plan to sell USD/JPY if the 145.61 level is tested twice in a row while the MACD is in the overbought zone. This would limit the pair's upward potential and trigger a bearish reversal. A drop toward 145.05 and 144.32 may follow.

What's on the Chart:

• The thin green line represents the entry price where the trading instrument can be bought.
• The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
• The thin red line represents the entry price where the trading instrument can be sold.
• The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
• The MACD indicator should be used to assess overbought and oversold zones when entering the market.

Important Notes:

• Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
• Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.