Review of trades and trading tips for the Japanese yen

The price test at 158.05 coincided with a moment when the MACD indicator was just beginning to move above the zero line, confirming the correct entry point to buy the dollar. But a major rise in the pair did not materialize.

Despite the dollar's decline versus a number of risk assets, against the Japanese yen, the US currency feels more or less confident. It is now widely believed that the Bank of Japan will keep its key interest rate unchanged on Friday, which will not support the yen but will instead keep traders alert to possible currency interventions by the government in case of further yen weakness.

At the same time, factors could shift the current balance of forces. First, an unexpected shift in the Bank of Japan's rhetoric: if the central bank suddenly signals plans for further rate hikes, that could trigger a sharp yen rally. Inflation data released before the decision are also important and could seriously affect the central bank's plans. For now, however, the yen is likely to gradually weaken against the dollar, so I will be watching for buying opportunities in USD/JPY.

As for the intraday strategy, I will rely mainly on the implementation of Scenarios No. 1 and No. 2.

Scenarios for buying

Scenario No. 1: I plan to buy USD/JPY today upon reaching an entry point around 158.33 (green line on the chart), targeting a rise to 158.73 (thicker green line on the chart). Around 158.73, I intend to exit longs and open shorts in the opposite direction (expecting a 30–35-pip move in the opposite direction from that level). It is best to return to buying the pair on corrections and significant pullbacks in USD/JPY. Important! Before buying, make sure the MACD indicator is above the zero line and is only just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today if the MACD indicator is in the oversold area and the price tests 157.94 twice. This will limit the pair's downside potential and lead to an upward reversal. One can expect a rise to the opposite levels, 158.33 and 158.73.

Scenarios for selling

Scenario No. 1: I plan to sell USD/JPY today only after the 157.94 level (red line on the chart) is breached, which will trigger a rapid decline in the pair. The key target for sellers will be 157.48, where I intend to exit shorts and immediately open buys in the opposite direction (expecting a 20–25?pip move in the opposite direction from that level). It is better to sell at the highest possible price. Important! Before selling, make sure the MACD indicator is below the zero line and is only just beginning to fall from it.

Scenario No. 2: I also plan to sell USD/JPY today if the MACD indicator is in the overbought area and the pair tests 158.33 twice. This will limit the pair's upside potential and lead to a market reversal downward. One can expect a decline to the opposite levels, 157.94 and 157.48.

What is on the chart

• Thin green line — entry price at which you can buy the instrument
• Thick green line — suggested Take Profit price or level at which to manually lock in profit, since further rise above this level is unlikely.
• Thin red line — entry price at which you can sell the instrument
• Thick red line — suggested Take Profit price or level at which to manually lock in profit, since further decline below this level is unlikely.
• MACD indicator — when entering the market, it is important to follow the overbought and oversold zones
• Important notes: Beginner forex traders must be very cautious when deciding to enter the market. It is best to be out of the market before major fundamental reports are released to avoid being caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit quickly, especially if you do not use money management and trade large volumes.
• Remember that successful trading requires a clear trading plan like the one presented above. Spontaneous trading decisions based on current market noise are a losing strategy for the intraday trader.