Trade analysis and tips on trading the Japanese yen
The test of the 148.15 price in the first half of the day occurred when the MACD indicator had already moved far above the zero mark, which limited the pair's upward potential. For this reason, I did not buy the dollar and missed the upward move of the pair.
During the U.S. session, fairly important data on U.S. new home sales is expected. Growing problems in the housing market could negatively affect the dollar's bullish outlook against the yen. The real estate market traditionally serves as a barometer of the overall economy. A decline in new home sales may signal weakening consumer confidence, reduced investment, and, as a result, slower economic growth. If U.S. housing data disappoints, this could trigger a capital flow into the yen, increasing pressure on the dollar in USD/JPY.
As for intraday strategy, I will rely mainly on Scenarios No. 1 and No. 2.
Buy signal
Scenario No. 1: Today, I plan to buy USD/JPY at an entry point around 148.49 (green line on the chart), targeting 148.99 (thicker green line on the chart). Around 148.99, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point reversal from the level). Counting on further pair growth is possible in continuation of the bullish market. Important! Before buying, make sure the MACD indicator is above the zero mark and 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 148.19 when the MACD is in the oversold area. This will limit the pair's downward potential and trigger a reversal upward. Growth can be expected toward the opposite levels of 148.49 and 148.99.
Sell signal
Scenario No. 1: I plan to sell USD/JPY after it breaks below 148.19 (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be 147.76, where I will exit shorts and immediately open longs in the opposite direction (expecting a 20–25 point reversal from the level). Pressure on the pair may return if the Fed takes a dovish stance. Important! Before selling, make sure the MACD indicator is below the zero mark and 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 148.49 when the MACD is in the overbought area. This will limit the pair's upward potential and trigger a reversal downward. A decline can be expected toward the opposite levels of 148.19 and 147.76.
What's on the chart:
- Thin green line – entry price for buying the instrument;
- Thick green line – estimated price for setting Take Profit or fixing profit manually, as further growth above this level is unlikely;
- Thin red line – entry price for selling the instrument;
- Thick red line – estimated price for setting Take Profit or fixing profit manually, as further decline below this level is unlikely;
- MACD indicator. When entering the market, it is important to use overbought and oversold zones as guidance.
Important: Beginner forex traders must be very cautious when making entry decisions. Before the release of major fundamental reports, it is best to stay out of the market to avoid 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 ignore money management and trade with large volumes.
And remember, successful trading requires a clear trading plan, like the one I have outlined above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.
