The price test at 157.58 occurred when the MACD indicator had moved significantly below the zero mark, limiting the pair's downside potential. The second test at 157.58 coincided with the MACD being in the oversold area, which led to the execution of Scenario #2 to buy the dollar and resulted in a 30-pip rise.
Renewed pressure on high-risk investments was observed immediately after news of Iran's potential actions to mine the Strait of Hormuz, which triggered increased demand for the U.S. dollar and a weakening of the Japanese yen. It's worth noting that Japan heavily depends on energy resources that transit through this strait, so the yen's reaction to this news was not surprising.
Today's data on the decline of the Producer Price Index (PPI) for Japanese corporations had no impact on the USD/JPY pair. Apparently, traders will continue to closely monitor developments in the Middle East and will react accordingly.
As for the intraday strategy, I will rely more on implementing scenarios #1 and #2.
Scenario #1: I plan to buy USD/JPY today when the price reaches an entry point around 158.19 (green line on the chart), with a target at 158.67 (thicker green line on the chart). Near 158.67, I intend to exit the long positions and open shorts in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). It is best to return to buying the pair on corrections and significant pullbacks in USD/JPY. Important! Before buying, ensure 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 if there are two consecutive tests of the price 157.97 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to the market reversing upward. One can expect growth to the opposite levels of 158.19 and 158.67.
Sell ScenariosScenario #1: I plan to sell USD/JPY today only after a retest of the 157.97 level (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 157.54 level, where I intend to exit shorts and open longs immediately in the opposite direction (expecting a 20-25-pip move in the opposite direction from the level). It is better to sell as high as possible. Important! Before selling, ensure 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 if there are two consecutive tests of the price 158.19 when the MACD indicator is in the overbought area. This will limit the pair's upside potential and could lead the market to reverse downward. One can expect a decline to the opposing levels of 157.97 and 157.54.
Important: Beginner traders in the forex market need to make entry decisions very carefully. It is best to stay out of the market before the release of important fundamental reports to avoid sharp fluctuations in prices. If you choose to trade during the release of news, always set Stop Loss orders to minimize losses. Without placing Stop Loss orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
And remember, successful trading requires 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 intraday traders.