Trade Analysis and Tips for the Japanese Yen

The price test at 162.22 occurred when the MACD indicator had moved significantly below the zero mark, limiting the pair's downward potential. For this reason, I did not sell the dollar.

Yesterday, the dollar against the yen ignored data showing that the ISM Services PMI in the U.S. was weaker than expected, dropping to 54. The Japanese yen continued to fall against the dollar, as traders primarily interpret such releases through the lens of yields. According to Japan's Minister of Economic Strategy, Minoru Kiuchi, reports claiming that the administration of Prime Minister Sanae Takachi is trying to maintain low interest rates and ease efforts to improve the budget situation are entirely unfounded. The minister aims to reassure the market that no one is abandoning further rate hikes, which logically should support the yen and lead to a decrease in USD/JPY.

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

Buy Scenarios

• Scenario No. 1: I plan to buy USD/JPY today at an entry point around 162.02 (green line on the chart), targeting a move to 162.52 (thicker green line on the chart). At around 162.52, I will exit from long positions and immediately sell in the opposite direction (aiming for a movement of 30-35 pips back from that level). The best time to return to buying the pair is during corrections and significant dips in USD/JPY. Important! Before purchasing, ensure that the MACD indicator is above the zero mark and just beginning its rise from it.
• Scenario No. 2: I also plan to buy USD/JPY today if there are two consecutive tests of 161.81 while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. You can expect growth towards opposing levels of 162.02 and 162.52.

Sell Scenarios

• Scenario No. 1: I plan to sell USD/JPY today only after breaking the level of 161.81 (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 161.29, where I intend to exit short positions and immediately buy in the opposite direction (aiming for a move of 20-25 pips back from that level). Sellers may return at any moment; a hint from the central bank could serve as a trigger. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning its decline from it.
• Scenario No. 2: I also plan to sell USD/JPY today if there are two consecutive tests of 162.02 while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. You can expect a decrease towards opposing levels of 161.81 and 161.29.

What the Chart Shows:

• The thin green line represents the entry price for buying the trading instrument;
• The thick green line is the estimated price at which to set Take Profit or lock in profits, as further upward movement is unlikely above this level;
• The thin red line is the entry price for selling the trading instrument;
• The thick red line is the estimated price at which to set Take Profit or lock in profits, as further downward movement is unlikely below this level;
• The MACD indicator. It is important to base market entries on overbought and oversold zones.

Important: Beginning traders in the Forex market must make entry decisions very cautiously. Before the release of significant fundamental reports, it is best to stay out of the market to avoid sudden price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I have presented above. Making spontaneous trading decisions based on the current market situation is fundamentally a losing strategy for intraday traders.