Trade Analysis and Tips for Trading the Japanese Yen

The price test at 159.05 coincided with the MACD indicator moving significantly above the zero mark, which limited the pair's upside potential. The second test at 159.05 prompted the implementation of Scenario #2 to sell the dollar, resulting in a 25-pip decline.

The Japanese yen gained slightly after the head of the IMF mission in Japan, Rahul Anand, said that clear communication from the Bank of Japan will be even more important amid ongoing uncertainty stemming from tensions in the Middle East. Anand added that the Bank of Japan should continue to reduce its accommodative monetary policy measures and adhere to a neutral level by 2027, based on the fund's baseline forecast. Additionally, the central bank must rely on data and exhibit flexibility. However, the dip in USD/JPY was quickly bought back, maintaining the neutrality observed in the pair in recent days.

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

Buying Scenarios

Scenario #1: I plan to buy USD/JPY today upon reaching an entry point around 158.98 (green line on the chart), targeting a move to 159.45 (thicker green line on the chart). At approximately 159.45, I plan to exit my long positions and open short positions in the opposite direction (anticipating a movement of 30-35 pips from the entry point). It is best to return to buying the pair during corrections and significant dips in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning its upward movement from there.

Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the price at 158.68 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. One can expect growth toward the opposing levels of 158.98 and 159.45.

Selling Scenarios

Scenario #1: I plan to sell USD/JPY today only after updating the level at 158.68 (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the level of 158.39, where I plan to exit my shorts and immediately open longs in the opposite direction (anticipating a movement of 20-25 pips in the opposite direction from the level). It is better to sell as high as possible. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning its downward movement from there.

Scenario #2: I also plan to sell USD/JPY today if the price tests 158.98 twice while the MACD is in the overbought area. This will limit the pair's upside potential and lead to a market reversal downward. One can expect a decline to the opposing levels of 158.68 and 158.39.

What Is On The Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the expected price where Take Profit can be set, or profits can be secured, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the expected price where Take Profit can be set, or profits can be secured, as further decline below this level is unlikely;
• MACD Indicator. It is important to be guided by overbought and oversold zones upon entering the market.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to be out of the market before important fundamental reports are released to avoid being caught in sharp price fluctuations. If you choose to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.