Trade Review and Tips for Trading the Japanese Yen

The test of the 157.11 level occurred when the MACD indicator had just begun moving downward from the zero mark, confirming a good entry point for selling the dollar. As a result, the pair dropped by 100 points.

Another intervention by the Bank of Japan led to a large-scale sell-off of the dollar and buying of the Japanese yen. However, most of the pair's decline was quickly reversed. In the second half of the day, the U.S. Manufacturing PMI is expected to be released. An ISM Manufacturing PMI reading above forecasts typically supports the U.S. dollar. This could lead to further gains in USD/JPY—especially at such attractive price levels.

A scenario in which the index shows deterioration or falls short of expectations could trigger another sell-off in the pair. Signs of weakness in the U.S. manufacturing sector may indicate a slowdown in economic growth, reducing the attractiveness of U.S. assets and leading to a decline in the dollar.

As for the intraday strategy, I will rely more on implementing Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy USD/JPY today upon reaching the entry point around 156.77 (green line on the chart), targeting growth to 157.58 (thicker green line on the chart). Around 157.58, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point move). Growth in the pair today is likely only with strong U.S. data.Important! Before buying, make sure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today if there are two consecutive tests of the 156.40 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 156.77 and 157.58 can be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY today after a breakout above 159.40 (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 155.35, where I will exit short positions and immediately open long positions in the opposite direction (expecting a 20–25 point move). Pressure on the pair will return today if U.S. data is weak.Important! Before selling, make sure the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today if there are two consecutive tests of the 156.77 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 156.40 and 155.35 can be expected.

Chart Explanation

• Thin green line – entry price for buying the instrument;
• Thick green line – estimated level for placing Take Profit or locking in profits, as further growth above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – estimated level for placing Take Profit or locking in profits, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important: Beginner Forex traders should be very cautious when making market entry decisions. Before the release of major fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you choose to trade during news releases, always set stop-loss orders to minimize losses. Without stop-loss orders, you can quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

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