Trade Analysis and Tips for Trading the Japanese Yen

The price test at 161.80 coincided with the moment when the MACD indicator was just beginning to move down from the zero mark, confirming the correct entry point to sell the dollar. As a result, the pair decreased by 15 pips.

The dollar slightly retreated against the Japanese yen after inflation data came in lower than many had expected. The core PCE index in the U.S. rose by 0.3% in May, matching economists' forecasts, which led to a slight decline in USD/JPY in the afternoon. For dollar buyers, this inflation report was disappointing, as they were hoping for a stronger result that could prompt the Federal Reserve to take more aggressive actions sooner.

The pressure on the dollar was mitigated by the U.S. GDP data for the first quarter, which was significantly better than expectations, showing growth of 2.1%. This indicates the resilience of the American economy, which likely prevented the pair from a more significant decline. Strong economic growth may support the dollar in the long term, even in the face of moderate inflation metrics. The Japanese yen, on the other hand, is currently showing no clear trend. Its movements are correlating with the overall sentiment in global markets, expectations regarding Bank of Japan policy, and currency interventions.

Regarding the intraday strategy, I will focus more on implementing scenarios #1 and #2.

Buy Scenarios

Scenario #1: I plan to buy USD/JPY today when the entry point reaches around 161.69 (green line on the chart), aiming for growth towards the level of 161.85 (the thicker green line on the chart). Around 161.85, I intend to exit the long positions and open short positions back, anticipating a move of 30-35 pips in the opposite direction from that level. It is best to return to buying the pair during corrections and significant dips in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting to rise from it.

Scenario #2: I also plan to buy USD/JPY today if there are two consecutive tests of 161.58 while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. An increase to the opposite levels of 161.69 and 161.85 can be expected.

Sell Scenarios

Scenario #1: I plan to sell USD/JPY today only after the 161.58 level is breached (red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be 161.41, where I intend to exit the shorts and immediately open longs (anticipating a move of 20-25 pips in the opposite direction from that level). Sellers will return at any moment; they just need a hint from the central bank. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting to decline from it.

Scenario #2: I also plan to sell USD/JPY today if there are two consecutive tests of 161.69 while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. A decrease to the opposite levels of 161.58 and 161.41 can be anticipated.

What's on the Chart:

Thin green line – entry price for buying the trading instrument;

Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;

Thin red line – entry price for selling the trading instrument;

Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;

MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp 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 are not using money management and are trading large volumes.

And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.