Analysis of Trades and Trading Tips for the Japanese Yen
The price test of 156.87 occurred when the MACD indicator was just beginning to move downward from the zero line, confirming a valid entry point for selling the dollar. However, the pair did not experience a significant decline.
The yen will then take a wait-and-see approach to US economic data, and the outcome of USD/JPY trading will largely be determined in the second half of the day. The three-part set of US releases — GDP, ADP, and core PCE — creates a complex backdrop. The revision of second-quarter GDP to 1.5% is unlikely to change the balance of forces by itself, while the ADP employment data and, especially, core PCE inflation for August could set the tone for the rest of the session. A PCE increase above 0.3% would strengthen expectations of a more hawkish Federal Reserve policy, in which case the dollar would receive upward momentum against the yen. However, it is worth remembering that there has recently been considerable discussion about coordinated support for the Japanese yen by Japan and the United States. Therefore, if the pair rises sharply, active selling cannot be ruled out, potentially driven by currency intervention. At the same time, if hawkish data are accompanied by corresponding rhetoric from Cook and Barkin, the pair could test the nearest resistance levels without significant breakouts.
As for the intraday strategy, I will focus primarily on scenarios No. 1 and No. 2.
Buy Signal
Scenario No. 1: I plan to buy USD/JPY today when the entry point is reached around 157.16 (the green line on the chart), with a target of 157.51 (the thicker green line on the chart). Around 157.51, I will exit the long position and open a short position in the opposite direction, targeting a move of 30–35 points from the level. A rise in the pair today is possible, but the upward potential is relatively limited. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.
Scenario No. 2: I also plan to buy USD/JPY today if the price tests 156.90 twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal to the upside. A rise toward the opposite levels of 157.16 and 157.51 can be expected.
Sell Signal
Scenario No. 1: I plan to sell USD/JPY today after the 156.90 level is broken (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 156.47, where I will exit the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points from the level. Downward pressure on the pair could return today if the central bank intervenes. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.
Scenario No. 2: I also plan to sell USD/JPY today if the price tests 157.16 twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal to the downside. A decline toward the opposite levels of 156.90 and 156.47 can be expected.
What the Chart Shows
- Thin green line — the entry price at which the trading instrument can be bought;
- Thick green line — the projected price at which Take Profit can be placed or profits can be taken manually, as further upside above this level is considered unlikely;
- Thin red line — the entry price at which the trading instrument can be sold;
- Thick red line — the projected price at which Take Profit can be placed or profits can be taken manually, as further downside below this level is considered unlikely;
- MACD indicator. When entering the market, it is important to consider the overbought and oversold zones.
Important. Beginner Forex traders should be very cautious when making entry decisions. Before the release of important fundamental reports, it is generally preferable to remain out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always use stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.
And remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is fundamentally an unsuccessful strategy for an intraday trader.
