Trade Analysis and Advice on Trading the Japanese Yen
The test of 147.23 in the first half of the day occurred when the MACD indicator had already moved far below the zero line, which limited the pair's downward potential. For this reason, I did not sell the dollar. The second test of 147.23 coincided with MACD being in the oversold area, which triggered scenario #2 for buying the dollar, but the pair did not actually manage to grow afterward.
For further downward movement in USD/JPY later in the day, the key drivers will be the U.S. ADP employment change report and the ISM Manufacturing Index. Investors will carefully analyze the incoming data to assess the state of the U.S. economy and the Fed's policy outlook. However, it should be emphasized that only significantly weak readings could trigger another wave of dollar selling and yen buying. Moderately negative or neutral results are unlikely to have a major impact, as the market has already priced in a degree of uncertainty about the Fed's next moves. The ISM Manufacturing Index, in particular, will be critical. A result below expectations may reinforce concerns about slowing U.S. growth, prompting investors to move out of dollar assets into safer instruments, such as the yen, which traditionally gains demand during periods of instability. Conversely, strong U.S. data will support the dollar and likely push USD/JPY upward.
As for intraday strategy, I will focus mainly on scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy USD/JPY at the entry point around 147.31 (green line on the chart) with a target at 147.83 (thicker green line on the chart). Around 147.83, I will exit longs and open shorts in the opposite direction (expecting a 30–35-point pullback). A rally can be expected only if U.S. data is very weak.Important! Before buying, make sure the MACD indicator is above zero and just starting to rise from it.
Scenario #2: I also plan to buy USD/JPY if there are two consecutive tests of 147.04 while MACD is in the oversold area. This would limit the pair's downward potential and trigger a reversal upward. Growth toward 147.31 and 147.83 can then be expected.
Sell Signal
Scenario #1: Today, I plan to sell USD/JPY after a break below 147.04 (red line on the chart), which would trigger a quick decline. The key bearish target will be 146.66, where I will exit shorts and immediately open longs in the opposite direction (expecting a 20–25-point pullback). Selling pressure may persist if the data is weak.Important! Before selling, make sure the MACD indicator is below zero and just starting to decline from it.
Scenario #2: I also plan to sell USD/JPY if there are two consecutive tests of 147.31 while MACD is in the overbought area. This would limit the pair's upward potential and trigger a reversal downward. A decline toward 147.04 and 146.66 can then be expected.
What's on the chart:
- Thin green line – entry price for buying the instrument;
- Thick green line – suggested price for Take Profit or manual exit, as further growth above this level is unlikely;
- Thin red line – entry price for selling the instrument;
- Thick red line – suggested price for Take Profit or manual exit, as further decline below this level is unlikely;
- MACD indicator – when entering the market, rely on overbought and oversold zones.
Important: Beginner Forex traders must be extremely cautious when making entry decisions. Before major fundamental reports, it is best to stay out of the market to avoid sharp fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit, especially if you skip money management and trade large volumes.
And remember, successful trading requires a clear trading plan like the one presented above. Spontaneous decision-making based solely on current market moves is an inherently losing intraday trading strategy.
