Trade Analysis and Advice for Trading the Japanese Yen

The price test at 156.72 occurred when the MACD indicator had already moved significantly upward from the zero line, which limited the pair's upward potential. For this reason, I did not buy the dollar.

Unfortunately, there is no U.S. data in the second half of the day. There are also no speeches from Federal Reserve officials, so strong dollar gains against the yen are unlikely. However, the bullish trend in USD/JPY is expected to remain intact.

The prospects for further dollar strength are driven by several key factors:

1. U.S. inflation, though slowing, remains significantly above the Fed's target, which means the regulator is likely to keep rates high, supporting the dollar.
2. The Japanese yen continues to be under pressure due to the ultra-loose policies of the new Prime Minister. The interest rate differential between the U.S. and Japan also plays an important role, making the dollar more attractive to investors.

For the intraday strategy, I will mainly rely on Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: Buy USD/JPY around 156.84 (green line on the chart) with a target of 157.16 (thicker green line). Around 157.16, plan to exit long positions and open short positions in the opposite direction, expecting a 30–35 point move. The pair's growth is expected to continue along the bullish trend.

Important: Before buying, ensure the MACD indicator is above zero and just starting to rise.

Scenario #2: Buy USD/JPY if the price tests 156.63 twice consecutively while the MACD is in the oversold area. This limits downward potential and triggers a market reversal upward. Expected growth levels are 156.84 and 157.16.

Sell Signal

Scenario #1: Sell USD/JPY after the price drops to 156.63 (red line on the chart), which will likely trigger a quick decline. The key target for sellers is 156.32, where you plan to exit short positions and immediately buy in the opposite direction (expecting a 20–25 point move). Pressure on the pair is unlikely to return today.

Important: Before selling, ensure the MACD indicator is below zero and just starting to fall.

Scenario #2: Sell USD/JPY if the price tests 156.84 twice consecutively while the MACD is in the overbought area. This limits upward potential and triggers a market reversal downward. Expected declines are 156.63 and 156.32.

What's on the Chart

• Thin green line: Entry price for buying.
• Thick green line: Suggested Take Profit or exit level, as further growth above this is unlikely.
• Thin red line: Entry price for selling.
• Thick red line: Suggested Take Profit or exit level, as further decline below this is unlikely.
• MACD indicator: Consider overbought/oversold zones when entering trades.

Important Notes for Beginners:

Beginner Forex traders should be extremely cautious when entering the market. Stay out of the market before major fundamental reports to avoid sharp price swings. If trading during news releases, always set stop-loss orders to minimize losses. Without stop-loss orders, you can quickly lose your entire deposit, especially if trading large volumes without money management.

Remember: successful trading requires a clear trading plan, like the one outlined above. Spontaneous decisions based on the current market situation are inherently a losing strategy for intraday traders.