Trade review and tips for trading the Japanese yen

The price test of 147.98 occurred when the MACD indicator had just begun moving downward from the zero mark, confirming the correct entry point for selling the dollar. As a result, the pair declined toward the target level of 147.43.

During the U.S. session, consumer credit data may once again push USD/JPY higher. This is because an increase in consumer credit reflects growing consumer confidence and, consequently, strengthening of the U.S. economy. A strong U.S. economy traditionally supports the dollar. However, it is important to remember that the forex market is influenced by many factors, and while credit statistics matter, they are not the only determinant for USD/JPY. Investor sentiment regarding the monetary policy outlooks of the Federal Reserve and the Bank of Japan will also play a decisive role.

Political issues should not be overlooked either. Yesterday, Japan's Prime Minister Shigeru Ishiba announced his resignation. The decision came under pressure from the ruling Liberal Democratic Party, which had been mounting for several weeks following a historic defeat in the upper house elections in July. New candidates for the post could add further market volatility in the USD/JPY pair.

As for intraday strategy, I will rely more on Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy USD/JPY around 147.95 (green line on the chart) with a target at 148.45 (thicker green line on the chart). Around 148.45, I will exit buy positions and open sells in the opposite direction (expecting a 30–35 point pullback from the level). A strong rise in the pair is possible only after robust U.S. data.Important! Before buying, make sure the MACD indicator is above the zero mark and only beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY if there are two consecutive tests of 147.60 at the moment when the MACD indicator is in the oversold area. This will limit the pair's downward potential and trigger a reversal upward. Growth can be expected toward the opposite levels of 147.95 and 148.45.

Sell Signal

Scenario #1: I plan to sell USD/JPY after breaking below 147.60 (red line on the chart), which will lead to a quick decline in the pair. Sellers' key target will be 147.02, where I will exit sell trades and immediately open buys in the opposite direction (expecting a 20–25 point pullback from the level). Selling pressure on the pair will return if U.S. data comes in weak.Important! Before selling, make sure the MACD indicator is below the zero mark and only beginning to fall from it.

Scenario #2: I also plan to sell USD/JPY if there are two consecutive tests of 147.95 at the moment when the MACD indicator is in the overbought area. This will limit the pair's upward potential and trigger a reversal downward. A decline can be expected toward the opposite levels of 147.60 and 147.02.

What's on the chart:

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

Important: Beginner Forex traders must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during news releases, always set stop-loss orders to minimize losses. Without stop-losses, you can very quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember: for successful trading, you need a clear trading plan, like the one I presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.