The price test at 158.07 occurred as the MACD indicator began moving down from the zero mark, confirming a valid entry point to sell the dollar. As a result, the pair fell by 15 pips.
The dollar weakened noticeably after the report that the US approved the Pakistani commander's proposal to Iranian officials. It partially meets Tehran's demand to return frozen funds. However, rumors of a soon agreement were not later confirmed. Today's fresh Japanese data showed how painful the recent months have been. The seasonally adjusted balance of foreign trade for September was negative JPY 704.0 billion versus a forecast of negative JPY 260.0 billion and negative JPY 801.1 billion previously. The unadjusted balance was negative JPY 536.6 billion versus a forecast of negative JPY 181.0 billion and negative JPY 1,111.9 billion a month earlier. The deficit narrowed from August but was still significantly worse than expected. I believe only hopes of de-escalation will help the yen, which would lead to a decline in USD/JPY; however, refutation of the rumors could quickly return demand for the dollar in the near term.
For intraday strategy, I will mainly rely on Scenarios 1 and 2.
Scenario No. 1: I plan to buy USD/JPY today when it reaches an entry point around 158.24 (the green line on the chart), targeting a rise to 158.47 (the thicker green line on the chart). Around 158.47, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35-pip move away from the level). It is best to return to buying the pair on corrections and significant USD/JPY drawdowns. Important! Before buying, make sure the MACD indicator is above the zero mark and is only beginning to rise from it.
Scenario No. 2: I also plan to buy USD/JPY today in the event of two consecutive tests of the price 158.11 at a time when the MACD indicator is in the oversold area. This will limit the pair's downside and lead to an upward market reversal. One can expect a rise to the opposite levels of 158.24 and 158.47.
Scenarios for SellingScenario No. 1: I plan to sell USD/JPY today only after the 158.11 level is refreshed (red line on the chart), which will lead to a rapid decline in the pair. Sellers' key target is 157.93, where I intend to exit shorts and immediately open longs in the opposite direction (expecting a 20–25-pip move away from the level). Sellers will return at any moment; only a hint from the central bank is needed. Important! Before selling, make sure the MACD indicator is below the zero mark and is only beginning to decline from it.
Scenario No. 2: I also plan to sell USD/JPY today in the event of two consecutive tests of the price 158.24 at a time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. One can expect a decline to the opposite levels of 158.11 and 157.93.
Thin green line — entry price where you can buy the instrument.
Thick green line — approximate price where you can place Take Profit or manually lock in profits, because further upside above this level is unlikely.
Thin red line — entry price where you can sell the instrument.
Thick red line — approximate price where you can place Take Profit or manually lock in profits, because further downside below this level is unlikely.
MACD indicator. When entering the market, it's important to consider overbought and oversold zones.
Important. Novice Forex traders must be very cautious when deciding to enter the market. It is best to stay out before major fundamental reports to avoid getting caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes.
Remember: successful trading requires a clear trading plan, like the example above. Spontaneous trade decisions based solely on the immediate market situation are, by definition, a losing strategy for an intraday trader.