Trade Review and Recommendations for the Japanese Yen

The test of the 147.55 level occurred when the MACD indicator had just begun to move downward from the zero line, confirming a valid sell entry for the dollar. However, the pair did not experience a significant drop.

Later in the day, the Richmond Fed Manufacturing Index is scheduled for release, but more attention will be on Federal Reserve Chair Jerome Powell's speech. Any indications of interest rate cuts could put pressure on the U.S. dollar and trigger fresh demand for the yen. If the Fed Chair signals readiness for a more accommodative monetary policy—either through direct references to rate cuts or more cautious statements on the economic outlook—the dollar will likely come under pressure. In such a case, the yen, traditionally considered a safe-haven currency, may attract significant capital inflows. Investors, concerned about the declining returns on dollar-denominated assets, may shift funds into safer and more stable assets like the yen. This demand would push the yen higher against the dollar, creating favorable conditions for buying the Japanese currency.

On the other hand, if Powell maintains a hawkish tone and emphasizes the need to keep rates at their current levels, the dollar will strengthen, while the yen will likely weaken.

As for intraday strategy, I will primarily focus on implementing Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today upon reaching the entry point around 147.70 (green line on the chart), targeting a rise to 148.21 (thicker green line on the chart). At 148.21, I will exit long positions and open short positions in the opposite direction, expecting a 30–35 point correction. A strong rise in the pair is likely only if Powell takes a hawkish stance. Important: Before buying, make sure the MACD indicator is above the zero line and just beginning to rise.

Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the 147.35 level while the MACD is in the oversold zone. This would limit the pair's downward potential and lead to a reversal upward. The expected targets are 147.70 and 148.21.

Sell Signal

Scenario #1: I plan to sell USD/JPY today after a break below 147.35 (red line on the chart), which could trigger a quick decline in the pair. The main target for sellers will be 146.96, where I will exit short positions and consider reversing into long positions, aiming for a 20–25 point rebound. Downward pressure may return at any moment today. Important: Before selling, make sure the MACD indicator is below the zero line and just beginning to decline.

Scenario #2: I also plan to sell USD/JPY today in the event of two consecutive tests of the 147.70 level while the MACD is in the overbought zone. This would limit the pair's upward potential and lead to a reversal downward. The expected targets are 147.35 and 146.96.

What's on the chart:

• Thin green line – Entry price for buying the instrument
• Thick green line – Suggested Take Profit or target area, as further growth above this level is unlikely
• Thin red line – Entry price for selling the instrument
• Thick red line – Suggested Take Profit or target area, as further decline below this level is unlikely
• MACD indicator – Use overbought and oversold zones when entering trades

Important Note for Beginner Traders:

Beginner Forex traders must be very cautious when deciding to enter the market. It is best to stay out of the market before important fundamental reports are released to avoid sharp price swings. If you choose to trade during such events, always set stop-loss orders to minimize potential losses. Without stop-losses, your entire deposit can be lost very quickly, especially if you are trading with large volumes and not following proper money management.

Remember: successful trading requires a clear trading plan, like the one presented above. Making spontaneous trading decisions based on current market conditions is typically a losing strategy for intraday traders.