Trade Analysis and Tips for Trading the Japanese Yen

The test of the 155.48 price level occurred at a moment when the MACD indicator had already moved significantly upward from the zero line, which limited the pair's upward potential. For this reason, I did not buy the dollar.

The second half of the day for USD/JPY may turn out to be more volatile. U.S. retail sales data, which serve as a kind of mirror of consumer spending, are among the key fundamental indicators of economic conditions. Favorable statistics may indicate sustainable economic growth, which in turn would lead to a rise in the dollar against the Japanese yen. Conversely, weak figures may signal a slowdown in economic growth, increasing the likelihood of a more accommodative Fed policy, which would be extremely negative for the dollar.

Along with the economic reports, statements from FOMC members Beth M. Hammack and Lori K. Logan will add context to the overall picture. Particular attention will be paid to comments regarding inflation levels and the labor market. However, it is quite likely that ahead of the release of the above-mentioned economic indicators later this week, policymakers will refrain from making any specific forecasts and will limit themselves to general remarks.

As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy USD/JPY upon reaching the entry point around 155.36 (green line on the chart), with a target of growth toward the 155.81 level (the thicker green line on the chart). Around 155.81, I will exit long positions and open short positions in the opposite direction (expecting a move of 30–35 points in the opposite direction from that level). A rise in the pair today can be expected after a hawkish stance from Fed representatives.Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in the case of two consecutive tests of the 155.11 price level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 155.36 and 155.81 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell USD/JPY after a break below the 155.11 level (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 154.71 level, where I plan to exit short positions and immediately open long positions in the opposite direction (expecting a move of 20–25 points in the opposite direction from that level). Pressure on the pair will return in the case of a dovish tone from policymakers.Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today in the case of two consecutive tests of the 155.36 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 155.11 and 154.71 can be expected.

What's on the Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated price where Take Profit orders can be placed or profits can be fixed manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated price where Take Profit orders can be placed or profits can be fixed manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to rely on overbought and oversold zones.

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

And remember that successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.