Review of trades and trading tips for the Japanese yen

The price test at 158.04 coincided with a moment when the MACD indicator was just beginning to move below the zero line, confirming the correct entry point to sell the dollar. But a major drop in the pair did not materialize.

On Friday, the US currency strengthened on the back of encouraging indicators showing a rise in US industrial production and statements by Federal Reserve leadership about the sufficiency of current interest rates. Trader sentiment improved thanks to positive news from the US economy, indicating a recovery in the industry. This reduced concerns about slowing economic growth and, consequently, the need for further monetary easing. Fed officials' remarks emphasized that current rate levels are adequate to support economic growth and achieve inflation targets. However, today's data on a sharp 11% decline in machinery and equipment orders in Japan immediately brought pressure back on the yen, leading to a small recovery in the USD/JPY pair. Further developments will depend on comments from central bank officials and any intervention in the national currency's exchange rate.

Regarding the intraday strategy, I will rely more on implementing scenarios No. 1 and No. 2.

Scenarios for buying

Scenario No. 1: I plan to buy USD/JPY today at an entry point around 158.16 (green line on the chart), with a target to rise to 158.80 (thicker green line on the chart). Around 158.80, I intend to exit longs and open shorts in the opposite direction (expecting a 30–35-pip move in the opposite direction from that level). It is best to return to buying the pair on corrections and significant pullbacks in USD/JPY. Important! Before buying, make sure the MACD indicator is above the zero line and is only just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today if the MACD indicator is in the oversold area and the price tests 157.75 twice. This will limit the pair's downside potential and lead to an upward reversal. One can expect a rise to the opposite levels, 158.16 and 158.80.

Scenarios for selling

Scenario No. 1: I plan to sell USD/JPY today only after the 157.75 level is renewed (red line on the chart), which will lead to a rapid decline of the pair. The key target for sellers will be 157.10, where I intend to exit shorts and immediately open longs in the opposite direction (expecting a 20–25-pip move in the opposite direction from that level). It is better to sell as high as possible. Important! Before selling, make sure the MACD indicator is below the zero line and is only just beginning to fall from it.

Scenario No. 2: I also plan to sell USD/JPY today if the MACD indicator is in the overbought area and the pair tests 158.16 twice. This will limit the pair's upside potential and lead to a market reversal downward. One can expect a decline to the opposite levels, 157.75 and 157.10.

What is on the chart

• Thin green line — entry price at which you can buy the instrument
• Thick green line — suggested Take Profit price or level at which to manually lock in profit, since further rise above this level is unlikely.
• Thin red line — entry price at which you can sell the instrument
• Thick red line — suggested Take Profit price or level at which to manually lock in profit, since further decline below this level is unlikely.
• MACD indicator — when entering the market, it is important to follow the overbought and oversold zones
• Important notes: Beginner forex traders must be very cautious when deciding to enter the market. It is best to be out of the market before major fundamental reports are released to avoid being caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit quickly, especially if you do not use money management and trade large volumes.
• Remember that successful trading requires a clear trading plan like the one presented above. Spontaneous trading decisions based on current market noise are a losing strategy for the intraday trader.