Review of Trades and Trading Tips for the Japanese Yen

The price test at 159.60 occurred when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential.

In the second half of the day, the market is awaiting the University of Michigan Consumer Sentiment Index and inflation expectations, while the main event will be Fed Chair Kevin Warsh's speech in Jackson Hole. Inflation expectations are important because the Fed takes them into account when assessing future price pressures, but Warsh's rhetoric will determine the dollar's direction through expectations for interest rates and U.S. Treasury yields. The outcome of the speech is directly relevant for the yen, as it is particularly sensitive to Fed policy given the much more cautious approach of the Bank of Japan. A hawkish tone from Warsh could push USD/JPY higher, widening the gap between the approaches of the two central banks, while a calm message would weaken the dollar and allow the yen to regain some ground. The possibility of intervention should also be considered, as the Bank of Japan has repeatedly intervened in the market to support the national currency when it weakened sharply. Therefore, if Warsh's hawkish remarks cause USD/JPY to rise too quickly, the possibility of intervention by the Japanese authorities could once again become a key market focus, while a dovish tone from the Fed Chair, by contrast, would ease this pressure and support the yen.

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

Buy Signal

Scenario #1: Today, I plan to buy USD/JPY when the entry point is reached around 159.79 (the green line on the chart), with a target of rising toward 160.28 (the thicker green line on the chart). Around 160.28, I will close the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. A rise in the pair can be expected today, but the upward potential is relatively limited. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario #2: Today, I also plan to buy USD/JPY if the price tests 159.56 twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal of the market to the upside. A rise toward the opposite levels of 159.79 and 160.28 can be expected.

Sell Signal

Scenario #1: Today, I plan to sell USD/JPY after the price breaks below 159.56 (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 158.93, where I will close the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Downward pressure on the pair will return if the central bank intervenes. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario #2: Today, I also plan to sell USD/JPY if the price tests 159.79 twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal of the market to the downside. A decline toward the opposite levels of 159.56 and 158.93 can be expected.

What Is Shown on the Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the expected price at which Take Profit can be placed or profits can be taken manually, 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 at which Take Profit can be placed or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold zones into account.

Important. Beginner Forex traders should make entry decisions very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during a news release, always place stop orders to minimize losses. Without stop orders, you can lose your entire account balance very quickly, especially if you do not use proper money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.