Trade Analysis and Tips for the Japanese Yen

The price test at 147.58 occurred when the MACD indicator had already moved significantly upward from the zero mark, which limited the pair's bullish potential. For this reason, I did not buy the dollar. The second test of this price happened when MACD was in the overbought area, which allowed Scenario #2 for selling to play out. However, after a 10-point decline, demand for the dollar returned.

In the second half of the day, U.S. manufacturing PMI and services PMI data will be released, along with the composite PMI report. Strong figures could quickly intensify pressure on the Japanese yen. The weakness of the yen is driven by several factors, including the Bank of Japan's accommodative monetary policy aimed at stimulating economic growth, and the widening interest rate differential between Japan and other developed countries, particularly the U.S. Strong U.S. economic data are expected to strengthen the dollar and increase pressure on the yen.

The composite PMI, which combines manufacturing and services data, will provide a broader picture of the U.S. economy. If it is strong, this will reinforce expectations that the Federal Reserve will keep interest rates at a high level for longer, further supporting the dollar and pressuring the yen.

As for the intraday strategy, I will be relying mainly on Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy USD/JPY at the entry point around 148.01 (green line on the chart) with a target of 148.56 (thicker green line on the chart). At around 148.56 I will exit long positions and open short positions in the opposite direction (expecting a 30–35-point pullback downward from the level). A rally in the pair is likely after strong U.S. data. Important! Before buying, make sure the MACD indicator is above the zero mark and has just started rising from it.

Scenario #2: I also plan to buy USD/JPY today in case of two consecutive tests of the 147.74 level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and trigger a reversal upward. Growth toward the opposite levels of 148.01 and 148.56 can be expected.

Sell Signal

Scenario #1: Today, I plan to sell USD/JPY after the 147.74 level is updated (red line on the chart), which would lead to a quick decline in the pair. The key target for sellers will be 147.27, where I will exit short positions and immediately open long positions in the opposite direction (expecting a 20–25-point rebound upward from the level). Downside pressure on the pair will return in the case of very weak U.S. data. Important! Before selling, make sure the MACD indicator is below the zero mark and has just started falling from it.

Scenario #2: I also plan to sell USD/JPY today in case of two consecutive tests of the 148.01 level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and trigger a reversal downward. A decline toward the opposite levels of 147.74 and 147.27 can be expected.

Chart Notes:

• Thin green line – entry price for buying the instrument;
• Thick green line – suggested price for setting Take Profit or fixing profit manually, as further growth above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – suggested price for setting Take Profit or fixing profit manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner traders in the Forex market should make trading decisions with great caution. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you choose to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember: successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous decisions based on the current market situation is an inherently losing strategy for intraday traders.