Trade Review and Trading Tips for the Japanese Yen
The 158.44 price test occurred when the MACD indicator was just beginning to move downward from the zero line, confirming that it was an appropriate entry point for selling the dollar and resulting in a 16-point decline in the pair.
In the second half of the day, the market is awaiting a batch of U.S. economic data, including weekly initial jobless claims, the Philadelphia Fed Manufacturing Index, and the Leading Economic Index. These indicators provide a broader picture of the state of the economy, and only very strong data will be able to restore support for the dollar by increasing expectations of higher Fed rates and pushing U.S. Treasury yields higher. If the data are weak, pressure on the U.S. currency will most likely persist. For the yen, the dollar's performance will remain decisive: if the dollar weakens, USD/JPY could continue to decline, while strong data would push the pair higher by widening the policy gap between the Fed and the cautious Bank of Japan.
As for the intraday strategy, I will focus more on the implementation of Scenarios #1 and #2.
Scenario #1: Today, I plan to buy USD/JPY when the entry point is reached around 158.69 (the green line on the chart), with a target of 158.99 (the thicker green line on the chart). Around 158.99, I will close the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. The pair may rise today, but the upward potential is rather limited. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.
Scenario #2: Today, I also plan to buy USD/JPY if the price tests 158.44 twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal higher. A rise toward the opposite levels of 158.69 and 158.99 can be expected.
Sell SignalScenario #1: Today, I plan to sell USD/JPY after the 158.44 level is broken (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 158.10, where I will close the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Downward pressure on the pair will return if the central bank intervenes. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.
Scenario #2: Today, I also plan to sell USD/JPY if the price tests 158.69 twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal lower. A decline toward the opposite levels of 158.44 and 158.10 can be expected.
Important. Beginner Forex traders should be extremely cautious when making decisions about entering the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during the release of economic data, always place stop orders to minimize losses. Without stop orders, you can lose your entire account balance very quickly, especially if you do not use proper money management and trade large volumes.
And remember that successful trading requires a clear trading plan, such as the one presented above. Making trading decisions spontaneously based on the current market situation is fundamentally a losing strategy for an intraday trader.