Analysis of Trades and Trading Tips for the Japanese Yen

The price test of 144.39 occurred at a time when the MACD indicator had already moved significantly above the zero level, which limited the dollar's upward potential. For this reason, I did not buy the dollar. The second test of 144.39 occurred when the MACD was in the overbought zone, which enabled the implementation of Scenario #2 for a sell, resulting in a 30-pip drop in the pair.

Today, following the release of strong data from Japan's Tankan Large Manufacturers Index, pressure on USD/JPY persisted. The index exceeded economists' forecasts. This, in turn, strengthened the yen's position as robust economic data boosted confidence in the continued stability of Japan's economy. However, the role of the U.S. dollar should not be overlooked. The further trajectory of USD/JPY will depend not only on Japanese but also on American economic data. The upcoming U.S. employment report this week could significantly affect the current trend. Weak labor market data could prompt the Federal Reserve to adopt a more dovish monetary policy, which would likely weaken the dollar. In the medium term, the key factor for USD/JPY will remain the policy divergence between the Federal Reserve and the Bank of Japan.

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 around 144.10 (indicated by the green line on the chart), targeting growth to 144.81 (represented by the thicker green line on the chart). Around 144.81, I plan to exit long positions and open a short in the opposite direction (expecting a 30–35 pip retracement from the level). It's best to buy the pair on corrections and significant pullbacks in USD/JPY.

Important! Before buying, ensure the MACD indicator is above the zero level and is just beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY today if there are two consecutive tests of the 143.64 level while the MACD is in the oversold zone. This would limit the pair's downside potential and lead to a market reversal upward. Growth toward the opposite levels, 144.10 and 144.81, can be expected.

Sell Scenario

Scenario #1: I plan to sell USD/JPY today only after the price breaks below the 143.64 level (red line on the chart), which could lead to a sharp decline in the pair. The key target for sellers will be 142.92, where I plan to exit shorts and open long positions in the opposite direction (expecting a 20–25 pip bounce from the level). Selling pressure on the pair may return quickly today.

Important! Before selling, ensure the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario #2: I also plan to sell USD/JPY today if there are two consecutive tests of the 144.10 level while the MACD is in the overbought zone. This would limit the pair's upside potential and lead to a market reversal downward. A drop toward the opposite levels, 143.64 and 142.92, can be expected.

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.