Analysis of Trades and Tips for Trading the Japanese Yen

The price test at 155.99 coincided with a moment when the MACD indicator had moved significantly up from the zero mark, which limited the upside potential of the pair. For this reason, I did not buy the dollar.

Today's news of a decline in Tokyo's consumer price index and a sharp drop in Japan's industrial production weakened the yen's position against the dollar. Data indicating slight deflationary trends and slowing economic growth increased pressure on the Bank of Japan, which recently raised interest rates. Investors now expect that the central bank will likely be more cautious in its next steps, which negatively impacts the yen's attractiveness. The decline in industrial production, especially in key sectors such as automotive and electronics, raised concerns about Japan's export competitiveness. Deterioration of these indicators may lead to a decrease in the trade surplus and, consequently, further weakening of the yen.

Regarding the intraday strategy, I will mainly rely on the implementation of scenarios No. 1 and No. 2.

Buying Scenarios

Scenario No. 1: I plan to buy USD/JPY today upon reaching an entry point around 156.34 (green line on the chart), targeting a move to 156.74 (thicker green line on the chart). Near 156.74, I intend to exit my long positions and sell back, expecting a movement of 30-35 pips in the opposite direction from the entry point. It's best to return to buying the pair during corrections and significant dips in USD/JPY. Important! Before buying on the breakout, ensure that the MACD indicator is above the zero mark and is just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in case of two consecutive tests of the price 156.12 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. One can expect a rise to the opposite levels of 156.34 and 156.74.

Selling Scenarios

Scenario No. 1: I plan to sell USD/JPY today only after the 156.12 level is updated (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 155.65 level, where I intend to exit my short positions and immediately buy back (expecting a 20-25-pip move in the opposite direction from that level). It is better to sell from as high a point as possible. Important! Before selling on the breakout, ensure that the MACD indicator is below the zero mark and is just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today in case of two consecutive tests of the price 156.34 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. One can expect a decline to the opposite levels of 156.12 and 155.65.

What is on the Chart:

• Thin green line – the entry price at which you can buy the trading instrument;
• Thick green line – the assumed price where you can set Take Profit or independently capture profits, as further growth above this level is unlikely;
• Thin red line – the entry price at which you can sell the trading instrument;
• Thick red line – the assumed price where you can set Take Profit or independently capture profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to navigate based on overbought and oversold zones.

Important Note:

Beginner Forex traders need to make decisions about entering the market very cautiously. Before major fundamental reports are released, it is best to remain out of the market to avoid getting caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on current market conditions are inherently a losing strategy for intraday traders.