Trade Analysis and Advice for Trading the Japanese Yen
The price test at 155.53 occurred when the MACD indicator had just started moving down from the zero line, confirming the correct entry point for selling the dollar. As a result, the pair declined by more than 30 points.
The anticipated Bank of Japan interest rate decision is already supporting the yen and could have a significant impact on global financial markets. Japan is one of the world's largest creditors, and a rate hike may lead to capital outflows from other countries, especially those with lower rates. This may also affect the value of Japanese assets and help stabilize the yen.
Later today, the focus will shift to the U.S. ISM Manufacturing Index data. Only exceptionally strong results—which are unlikely—will support the dollar. Otherwise, the figures could trigger a new wave of dollar selling, especially against the Japanese yen.
For intraday strategy, I will primarily rely on Scenarios #1 and #2.
Buy Signal
Scenario #1: Buy USD/JPY today around the entry point of 155.33 (green line on the chart) targeting a rise to 155.65 (thicker green line). Around 155.65, exit the buy position and open a sell in the opposite direction, expecting a 30–35 point reversal. Significant growth is unlikely today. Important: Before buying, ensure the MACD is above zero and just starting to rise.
Scenario #2: Buy USD/JPY if the price tests 155.04 twice while the MACD is in the oversold zone. This limits the pair's downward potential and may trigger a market reversal upward, targeting 155.33 and 155.65.
Sell Signal
Scenario #1: Sell USD/JPY after breaking the 155.04 level (red line), which will trigger a quick decline. The key target for sellers is 154.64, where I plan to exit the sell and immediately open a buy in the opposite direction, expecting a 20–25 point reversal. Pressure on the pair may persist today. Important: Before selling, ensure the MACD is below zero and just starting to fall.
Scenario #2: Sell USD/JPY if the price tests 155.33 twice while the MACD is in the overbought zone. This limits upward potential and may trigger a market reversal downward, targeting 155.04 and 154.64.
Chart Notes
- Thin green line – entry price for buying the instrument.
- Thick green line – expected level for Take Profit or manual profit-taking; further growth above this level is unlikely.
- Thin red line – entry price for selling the instrument.
- Thick red line – expected level for Take Profit or manual profit-taking; further decline below this level is unlikely.
- MACD indicator – use overbought and oversold zones to guide entry decisions.
Important Notes for Beginners:
Beginner Forex traders should exercise extreme caution when entering the market. It's best to stay out before major fundamental reports to avoid sharp price fluctuations. If trading during news releases, always use stop orders to minimize losses. Without stop orders, you could quickly lose your entire deposit, especially if trading large volumes without proper money management.
Remember: successful trading requires a clear trading plan, like the one outlined above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for intraday traders.
