Trade Analysis and Tips for the Japanese Yen
The test of the price at 153.17 coincided with the moment when the MACD indicator was just starting to move above the zero mark, confirming a valid entry point for buying the dollar. As a result, the pair rose towards the target level of 153.65.
Despite the encouraging manufacturing data, the short-term prospects for the U.S. currency came under pressure due to more cautious comments from Federal Reserve representatives. The statements from Austan Goolsbee, a member of the Federal Open Market Committee, regarding the central bank's readiness for active interest rate cuts in the event of sustained inflation easing had a noticeable impact on the dollar. The market perceived these remarks as a signal that the Federal Reserve does not plan to prolong the period of high rates if inflation expectations slow more quickly. By opening the door to an earlier cycle of monetary easing, Goolsbee essentially gave investors a reason to reassess the attractiveness of dollar assets—especially against the Japanese yen.
Regarding data from Japan, today's report on the January trade surplus did not prompt active yen buying. Although the positive trade balance was significantly higher than economists' forecasts, reaching a level that could typically provoke a rally in the national currency, the Japanese yen exhibited only a timid response.
As for my intraday strategy, I will focus more on Scenarios 1 and 2.
Buy Scenarios
Scenario 1: I plan to buy USD/JPY today upon reaching an entry point around 153.61 (green line on the chart) with a target growth to the level of 153.93 (thicker green line on the chart). Around 153.93, I intend to exit the long position and open a short position in the opposite direction (expecting a move of 30-35 pips in the opposite direction from the level). It is best to resume buying the pair on corrections and significant pullbacks in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and just starting to rise from it.
Scenario 2: I also plan to buy USD/JPY today in the event of two consecutive tests of the price at 153.43 when the MACD indicator is in the oversold area. This will limit the downward potential of the pair and lead to a market reversal upwards. Growth can be expected towards the opposite levels of 153.61 and 153.93.
Sell Scenarios
Scenario 1: I plan to sell USD/JPY today only after breaking the level of 153.43 (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 153.12 level, where I intend to exit the short position and immediately buy in the opposite direction (expecting a 20-25-pip move in the opposite direction from that level). It is better to sell as high as possible. Important! Before selling, ensure that the MACD indicator is below the zero mark and just starting to decline from it.
Scenario 2: I also plan to sell USD/JPY today in the event of two consecutive tests of the price at 153.61 when the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a market reversal downwards. A decline can be expected towards the opposite levels of 153.43 and 153.12.
What's on the Chart:
The thin green line represents the entry price at which one can buy the trading instrument;
The thick green line represents the approximate price where one can set Take Profit or secure profits, as further growth above this level is unlikely;
The thin red line represents the entry price at which one can sell the trading instrument;
The thick red line represents the approximate price where one can set Take Profit or secure profits, as further decline below this level is unlikely;
The MACD indicator: when entering the market, it is important to consider overbought and oversold zones.
Important: Beginner traders in the Forex market should be very careful when making entry decisions. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price 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.
And remember, for successful trading, it is essential to have a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.
