Analysis of Trades and Trading Tips for the Japanese Yen

The price test at 147.14 occurred when the MACD indicator had already moved well above the zero line, which limited the pair's upward potential.

Today's data showing a slower decline in machinery and equipment orders in Japan, along with strong figures for the growth of Japan's services activity index, supported the yen and led to a downward correction in the USD/JPY pair. However, despite this temporary reprieve for the Japanese currency, fundamental factors continue to point to a sustained upward trend for USD/JPY in the medium term.

First and foremost, it is important to consider the absence of a comprehensive trade agreement between Japan and the United States. This factor creates uncertainty for the Japanese economy and puts pressure on the yen. Until there is clarity in trade relations, investors are likely to remain cautious toward the Japanese currency.

Secondly, the divergence in monetary policy between the U.S. Federal Reserve and the Bank of Japan plays a key role. The Fed continues to pursue a tight monetary policy, while the BoJ maintains a wait-and-see approach aimed at stimulating economic growth. This interest rate differential makes the U.S. dollar more attractive to investors, exerting additional pressure on the yen.

For intraday strategy, I will focus primarily on implementing Scenarios #1 and #2.

Buy Scenario

Scenario #1: I plan to buy USD/JPY today upon reaching the entry point around 147.50 (green line on the chart), with a target of rising toward 147.96 (thicker green line on the chart). Around 147.96, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35 pip pullback from the level). It's best to return to buying the pair on corrections and significant pullbacks.

Important! Before buying, make sure that the MACD indicator is above the zero line and just beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the 147.20 level, at a time when the MACD indicator is in oversold territory. This will limit the pair's downside potential and lead to a reversal to the upside. A rise toward the opposite levels of 147.50 and 147.96 can be expected.

Sell Scenario

Scenario #1: I plan to sell USD/JPY today only after a break below the 147.20 level (red line on the chart), which would likely lead to a sharp decline in the pair. The key target for sellers will be 146.76, where I plan to exit short positions and immediately buy in the opposite direction (expecting a 20–25 pip rebound from the level). Strong downward pressure on the pair is unlikely today.

Important! Before selling, make sure that the MACD indicator is below the zero line and just beginning to decline from it.

Scenario #2: I also plan to sell USD/JPY today in the event of two consecutive tests of the 147.50 level, at a time when the MACD indicator is in overbought territory. This will limit the pair's upside potential and lead to a reversal to the downside. A decline toward the opposite levels of 147.20 and 146.76 can be expected.

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.