Trade Review and Advice on Trading the Japanese Yen

The test of the 149.56 level occurred when the MACD indicator had already moved significantly below the zero mark, which limited the pair's downside potential. For this reason, I did not sell the dollar and missed the entire downward move.

The Japanese yen surged sharply against the US dollar at the end of last week after news that the US Personal Consumption Expenditures (PCE) index rose by only 0.2%, entirely in line with economists' forecasts. Although expected, this release triggered a chain reaction in the currency markets. Investors interpreted it as a signal that the Federal Reserve may adjust its policy course as early as October this year. The dollar, which had previously been supported by expectations of aggressive monetary tightening, lost part of its appeal. The fact that actual data matched forecasts reduces the need for a wait-and-see stance, making US assets less attractive to foreign investors.

In the near term, the dynamics of the USD/JPY pair will depend on several key factors. First, upcoming economic data from the US and Japan will help assess the relative strength of both economies. Second, the rhetoric of central bank officials can shape market expectations.

As for the intraday strategy, I will focus more on implementing scenarios #1 and #2.

Buy Scenario

• Scenario #1: I plan to buy USD/JPY today at an entry point around 149.00 (green line on the chart), targeting 149.39 (thicker green line on the chart). Around 149.39, I intend to exit long positions and immediately open shorts on a reversal (expecting a 30–35-pip move in the opposite direction). It is best to buy the pair during pullbacks and deeper corrections in USD/JPY. Important: Before buying, ensure the MACD indicator is above the zero mark and is just starting to rise from it.

• Scenario #2: I also plan to buy USD/JPY if there are two consecutive tests of the 148.74 level at a time when the MACD indicator is in the oversold zone. This would limit the pair's downside potential and trigger a reversal upward. Growth toward 149.00 and 149.39 can then be expected.

Sell Scenario

• Scenario #1: I plan to sell USD/JPY today only after the 148.74 level (red line on the chart) is updated, which could lead to a quick decline in the pair. The key target for sellers will be 148.44, where I intend to exit short positions and immediately open longs on a reversal (expecting a 20–25-pip move in the opposite direction). It is preferable to sell from higher levels. Important: Before selling, ensure the MACD indicator is below the zero mark and is just starting to decline from it.

• Scenario №2: I also plan to sell USD/JPY in case of two consecutive tests of the 149.00 level when the MACD indicator is in the overbought zone. This would limit the pair's upside potential and trigger a downward reversal. A decline toward 148.74 and 148.44 can then be expected.

What's on the Chart:

Thin green line – entry price at which the instrument can be bought.

Thick green line – suggested price for taking profit or manually securing profits, as further growth above this level is unlikely.

Thin red line – entry price at which the instrument can be sold.

Thick red line – suggested price for taking profit or manually securing profits, as further decline below this level is unlikely.

MACD indicator: When entering the market, it is important to refer to overbought and oversold areas.

Important. Beginner forex traders should exercise extreme caution when making entry decisions. Before important fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during the release of news, always use stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes. And remember: for successful trading, you need a clear trading plan, as I described above. Making spontaneous trading decisions based on the current market situation from moment to moment is a losing strategy for an intraday trader.