Trade Review and Recommendations for Trading the Japanese Yen

The test of the 147.36 level occurred when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential. For this reason, I chose not to buy the dollar and missed out on a good upward move.

Traders digested strong Japanese PMI data, which weakened demand for the yen. Next, the market expects the release of favorable data from the U.S. services sector PMI, the composite PMI, and the trade balance. If these indicators confirm positive dynamics, the USD/JPY pair may continue to rise. However, if the actual figures match economists' forecasts, pressure on the pair is likely to return, as there will be no new catalysts for sustained upward movement. It is also important to keep in mind that a few strong reports do not guarantee long-term and stable economic growth. Other macroeconomic factors—such as inflation, interest rates, and the labor market—also play a key role, especially as they remain in focus for the U.S. Federal Reserve and political leaders.

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

Buy Signal

Scenario #1: I plan to buy USD/JPY today after reaching the entry point near 147.88 (green line on the chart), targeting growth toward 148.64 (thicker green line on the chart). Around 148.64, I will close long positions and open short positions in the opposite direction, aiming for a 30–35 point reversal. A strong upward move is more likely if the U.S. data is positive. Important! Before buying, ensure that the MACD indicator is above the zero line and just beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY if the price tests the 147.43 level twice in a row while the MACD indicator is in oversold territory. This would limit the downward potential and prompt a reversal to the upside. A rise toward 147.88 and 148.64 is then expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY today after the price breaks below the 147.43 level (red line on the chart), which could lead to a quick drop. The key target for sellers will be 146.68, where I plan to close short positions and open long positions in the opposite direction, aiming for a 20–25 point move. Selling pressure is likely to return if U.S. data disappoints. Important! Before selling, ensure that the MACD indicator is below the zero line and just beginning to move downward.

Chart Key:

• Thin green line – Entry price where the instrument can be bought
• Thick green line – Suggested Take Profit level or area where profit can be manually fixed, as further growth above this level is unlikely
• Thin red line – Entry price where the instrument can be sold
• Thick red line – Suggested Take Profit level or area where profit can be manually fixed, as further decline below this level is unlikely
• MACD Indicator – When entering the market, it's essential to monitor overbought and oversold areas

Important: Beginner traders in the Forex market must be extremely cautious when deciding to enter the market. It's best to avoid trading before the release of major economic reports to prevent exposure to sharp price fluctuations. If you decide to trade during news events, always place stop-loss orders to minimize potential losses. Trading without stop-losses can quickly lead to a complete loss of capital, especially if you ignore money management principles and trade large volumes.

Remember, successful trading requires a clear plan—like the one outlined above. Making spontaneous trading decisions based on current market movement is a losing strategy for intraday traders.