Analysis of Trades and Trading Tips for the Japanese Yen
The price test at 144.88 coincided with the moment when the MACD indicator had already moved significantly downward from the zero mark, limiting the pair's downside potential. For this reason, I did not sell the dollar.
The verdict of the highest judicial authority of the United States came as an unexpected and ambiguous signal for financial markets. The reinstatement of trade tariffs, even temporarily, instantly triggered a domino effect. Traders began selling the U.S. dollar and returned to the yen, which had been heavily oversold earlier this week. Attractive prices did their job.
Today's Tokyo Consumer Price Index (CPI) data, which showed a slight decrease, did not significantly impact the USD/JPY pair. Several factors, including market expectations and the broader macroeconomic context can explain this. Investors apparently had already priced in the anticipated slowdown, so the actual data was no surprise. Moreover, the market focus is largely on the Bank of Japan's (BoJ) policy and prospects for any changes in the near future. Going forward, the pair's dynamics will be driven by signals from the BoJ regarding its future policy and inflation and employment data from the U.S.
For intraday strategy, I will focus primarily on implementing Scenarios #1 and #2.
Buy Scenario
Scenario #1: Today, I plan to buy USD/JPY at the entry point around 144.17 (green line on the chart), targeting a rise to 145.05 (thicker green line on the chart). Around 145.05, I plan to exit the buy positions and open sell positions in the opposite direction (aiming for a 30–35 pip move from the entry point). It's best to return to buying the pair during corrections and significant pullbacks in USD/JPY. Important! Before buying, ensure the MACD indicator is above the zero mark and starting its upward movement.
Scenario #2: I also plan to buy USD/JPY today in the case of two consecutive tests of the 143.50 level when the MACD indicator is in the oversold area. This would limit the pair's downside potential and lead to an upward market reversal. A rise can be expected toward the opposing levels of 144.17 and 145.05.
Sell Scenario
Scenario #1: I plan to sell USD/JPY only after breaking below 143.50 (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be the 142.85 level, where I plan to exit the sales and immediately open buys in the opposite direction (aiming for a 20–25 pip move from the level). Downward pressure on the pair may persist today. Important! Before selling, make sure the MACD indicator is below the zero mark and just starting its downward movement.
Scenario #2: I also plan to sell USD/JPY today in the case of two consecutive tests of the 144.17 level when the MACD indicator is in the overbought area. This would limit the pair's upward potential and lead to a market reversal downward. A decline can be expected toward the opposing levels of 143.50 and 142.85.
What's on the Chart:
- The thin green line represents the entry price where the trading instrument can be bought.
- The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
- The thin red line represents the entry price where the trading instrument can be sold.
- The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
- The MACD indicator should be used to assess overbought and oversold zones when entering the market.
Important Notes:
- Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
- Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.
