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27.05.2025 08:22 PM
USD/JPY: Simple Trading Tips for Beginner Traders on May 27th (U.S. Session)

Trade Analysis and Recommendations for the Japanese Yen

The test of the 143.29 level occurred when the MACD indicator had already moved well above the zero line, which limited the pair's upward potential. For this reason, I chose not to buy the dollar and missed a good upward move.

Buying the dollar after a strong rally and the market's inadequate reaction to BoJ Governor Ueda's statement about his intent to continue raising rates seemed like a questionable decision—so I opted to skip the trade. The focus now shifts to the U.S. economy, where the key events will be the release of the Consumer Confidence Index and Durable Goods Orders. These indicators serve as gauges of the health of U.S. consumers and the manufacturing sector, respectively.

An increase in consumer confidence, backed by rising durable goods orders, would indicate stable economic growth and potentially support the U.S. dollar. Conversely, weakening figures may raise concerns about an economic slowdown and lead to dollar weakness.

Statements from Federal Reserve officials, especially regarding inflation and monetary policy outlooks, will also be closely watched by market participants today. Dovish signals hinting at future rate cuts could weigh on the dollar, while hawkish remarks emphasizing inflation could support it.

As for my intraday strategy, I will rely primarily on implementing Scenarios #1 and #2.

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Buy Signal

Scenario #1: I plan to buy USD/JPY at 144.35 (green line on the chart), targeting an increase to 145.10 (thicker green line). Around 145.10, I will exit long positions and open shorts in the opposite direction, aiming for a 30–35 point reversal. It's unlikely we'll see strong upward movement in the pair today. Important! Before buying, make sure the MACD indicator is above the zero line and just beginning to rise.

Scenario #2: I also plan to buy USD/JPY after two consecutive tests of the 143.78 level while MACD is in oversold territory. This would limit the pair's downside and may prompt a reversal upward. A move toward 144.35 and 145.10 could follow.

Sell Signal

Scenario #1: I plan to sell USD/JPY after a break below 143.78 (red line on the chart), which would trigger a rapid drop. The main target for sellers will be 143.06, where I will exit short trades and consider reversing into longs, expecting a 20–25 point rebound. A return of downward pressure on the pair today is unlikely. Important! Before selling, ensure the MACD indicator is below the zero line and just starting to fall.

Scenario #2: I'll also consider selling USD/JPY after two consecutive tests of the 144.35 level, with MACD in overbought territory. This would limit the pair's upside and may trigger a reversal to the downside, with an expected move toward 143.78 and 143.06.

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Chart Legend:

  • Thin green line – Entry price for long positions
  • Thick green line – Suggested Take Profit level or price to lock in profits, as further growth is unlikely above this point
  • Thin red line – Entry price for short positions
  • Thick red line – Suggested Take Profit level or price to lock in profits, as further decline is unlikely below this point
  • MACD indicator – Entry decisions should be guided by overbought and oversold zones

Important Note for Beginner Forex Traders:

New traders must exercise extreme caution when entering the market. It's best to stay out before key fundamental reports are released to avoid sudden price spikes. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Without stop-losses, you could quickly lose your entire deposit—especially if you ignore money management and trade large volumes.

And remember: a clear trading plan—like the one provided above—is essential for success. Making spontaneous decisions based on current market conditions is a losing strategy for any intraday trader.

Jakub Novak,
Analytical expert of InstaForex
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