Analysis of Trades and Tips for Trading the Japanese Yen

There were no tests of the levels I marked in the second half of the day, so I had no trades. The US dollar's active strengthening against the yen continues. After the panic over the possibility of the Bank of Japan intervening in currency markets subsided, traders returned to actively buying the dollar and selling the yen. Despite yesterday's mixed signals regarding the labor market from ADP, the dollar demonstrated strength against the yen.

Moreover, recently, the rhetoric of Japanese officials regarding potential currency intervention has become less convincing. Although representatives of the Bank of Japan continue to emphasize their readiness to take action in the event of excessive volatility in the yen, their statements no longer exert as strong a restraining effect on market participants as they did previously. As a result, the interest rate differential between the US and Japan continues to pressure the yen. Investors are seeking higher yields offered by US assets, leading to further strengthening of the dollar against the Japanese currency. In the short term, the dynamics of the USD/JPY pair will depend on macroeconomic data from the US and Japan, as well as the rhetoric of central bank officials. However, as long as the fundamental factors remain in favor of the dollar, the upward trend is expected to continue.

Regarding the intraday strategy, I will focus more on implementing scenarios No. 1 and No. 2.

Buy Scenarios

Scenario #1: I plan to buy USD/JPY today when it reaches an entry point around 157.07 (green line on the chart), with a target at 157.46 (thicker green line on the chart). At around 157.46, I intend to exit the long positions and open shorts in the opposite direction (expecting a 30-35-pip move back from this level). It is best to return to buying the pair on corrections and significant dips in USD/JPY. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise.

Scenario #2: I also plan to buy USD/JPY today in the case of two consecutive tests of the price at 156.81 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth can be expected towards the opposite levels of 157.07 and 157.46.

Sell Scenarios

Scenario #1: I plan to sell USD/JPY today only after updating the 156.81 level (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 156.43 level, where I plan to exit the shorts and immediately buy in the opposite direction (expecting a move of 20-25 pips back from this level). It is better to sell as high as possible. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning its descent.

Scenario #2: I also plan to sell USD/JPY today if there are two consecutive tests of 157.07 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline can be expected towards the opposite levels of 156.81 and 156.43.

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, like the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.