Analysis of Trades and Tips for Trading the Japanese Yen
The test of the 156.99 price level occurred when the MACD indicator was just beginning to move down from the zero mark, confirming a good entry point to sell the dollar. However, losses were recorded on the trade, as the pair did not decline.
The Bank of Japan, remaining vigilant, is actively intervening in the currency market; however, the Asian session today has been relatively calm. It appears that everyone is awaiting developments in the Middle East, which could bring a new military conflict between the US and Iran. Yesterday's attacks on a US warship and on UAE territory will clearly not go unanswered. The consequences of such developments could be catastrophic for the Japanese yen, which, after currency interventions, could again face major sell-offs against the US dollar. An open military confrontation between the US and Iran will inevitably increase demand for safe-haven assets, including the US dollar. Additionally, a new clash will have a massive impact on the global economy, leading to another spike in energy prices and rising inflation, which Japan is currently not prepared to endure.
Regarding the intraday strategy, I will focus more on implementing Scenarios #1 and #2.
Buy Scenarios
Scenario #1: I plan to buy USD/JPY today at the entry point around 157.35 (green line on the chart), with a target at 157.79 (thicker green line on the chart). At around 157.79, I intend to exit my long positions and open short positions in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). It is best to return to buying the pair on corrections and significant pullbacks in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and just starting to rise from it.
Scenario #2: I also plan to buy USD/JPY today if there are two consecutive tests of 157.15 while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. An increase to the opposite levels of 157.35 and 157.79 can be expected.
Sell Scenarios
Scenario #1: I plan to sell USD/JPY today only after updating the level to 157.15 (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 156.65 level, where I intend to exit my shorts and immediately open longs in the opposite direction (expecting a 20-25-pip move in the opposite direction from the level). Sellers may return at any moment; all it takes is a hint from the central bank. Important! Before selling, ensure that the MACD indicator is below the zero mark and just starting to decline from it.
Scenario #2: I also plan to sell USD/JPY today if there are two consecutive tests of 157.35 while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a market reversal downward. A decline to the opposite levels of 157.15 and 156.65 can be expected.
What is on the Chart:
- The thin green line – entry price at which the trading instrument can be bought;
- The thick green line – approximate price where take profit can be set or to realize profit, as further growth above this level is unlikely;
- The thin red line – entry price at which the trading instrument can be sold;
- The thick red line – approximate price where take profit can be set or to realize profit, as further decline below this level is unlikely;
- MACD indicator. When entering the market, it is important to be guided by overbought and oversold zones.
Important: Beginner traders in the Forex market need to make entry decisions very cautiously. It is best to stay out of the market before important fundamental reports to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.
And remember, for successful trading, it is essential to have a clear trading plan, as outlined above. Making impulsive trading decisions based on the current market situation is fundamentally a losing strategy for an intraday trader.
