Trade Analysis and Trading Tips for the Japanese Yen

The first test of the 158.44 price level occurred when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential. For this reason, I did not sell the dollar. The second test of 158.44 coincided with the MACD being in the oversold zone, which led to the implementation of Buy Scenario No. 2, with the pair rising by 15 points.

Next, we will see data on the Empire Manufacturing Index and U.S. industrial production figures. If these numbers exceed analysts' expectations, we can expect a rapid recovery in demand for the U.S. dollar and another decline in the Japanese yen. Positive results may indicate a revival in business activity in the United States, growth in order volumes, and consequently potential acceleration in GDP growth.

Market participants will closely analyze this data, taking into account its possible impact on Federal Reserve policy. More optimistic-than-expected figures could strengthen the case for tighter monetary policy. This, in turn, would increase the attractiveness of the U.S. dollar. On the other hand, if the released figures come in below expectations, this could reduce pressure on risk assets, allowing the yen to recover somewhat against the dollar by the end of the week.

As for the intraday strategy, I will rely mainly on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy USD/JPY upon reaching the entry point around 158.63 (green line on the chart), with a target of growth toward 159.05 (thicker green line on the chart). Around 159.05, I plan to exit long positions and open short positions in the opposite direction, expecting a movement of 30–35 points in the opposite direction from that level. Growth in the pair today can be expected if strong U.S. data is released.

Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today if there are two consecutive tests of the 158.42 price level while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and trigger an upward market reversal. In this case, growth toward the opposite levels of 158.63 and 159.05 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell USD/JPY after an update of the 158.42 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be the 158.16 level, where I plan to exit short positions and immediately open long positions in the opposite direction, expecting a movement of 20–25 points in the opposite direction from that level. Pressure on the pair will return today if weak U.S. data is released.

Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning its decline from it.

Scenario No. 2: I also plan to sell USD/JPY today if there are two consecutive tests of the 158.63 price level while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and trigger a downward market reversal. In this case, a decline toward the opposite levels of 158.42 and 158.16 can be expected.

What's on the Chart

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated Take Profit level or an area to manually lock in profits, since further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated Take Profit level or an area to manually lock in profits, since 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 should make market entry decisions very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp exchange-rate fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

And remember, successful trading requires a clear trading plan, like the example presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.