Trade analysis and tips for trading the Japanese yen

The test of the 158.92 level occurred when the MACD indicator had just started moving downward from the zero mark, confirming a correct entry point for selling the dollar. As a result, the pair declined by more than 20 points.

In the second half of the day, the focus will be only on U.S. current account balance data and the import price index. The current account balance essentially reflects the difference between exports and imports of goods and services, as well as net income flows from investments. Its widening or narrowing can provide insight into the overall competitiveness of the U.S. economy globally. A reduction in the deficit, for example, may be interpreted as a positive signal supporting the dollar. The import price index, in turn, is an indicator of inflationary pressure. However, only significant deviations from economists' forecasts are likely to trigger a market reaction. Most likely, traders will be more focused on developments in the Middle East.

As for the intraday strategy, I will mainly rely on the implementation of scenarios No. 1 and No. 2.

Buy signal

Scenario No. 1: I plan to buy USD/JPY today when the price reaches the entry point around 159.03 (green line on the chart), with a target of 159.45 (thicker green line on the chart). Around 159.45, I plan to exit long positions and open short positions in the opposite direction (targeting a 30–35 point move). Growth in the pair today can be expected in the case of strong U.S. data.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 if there are two consecutive tests of the 158.85 level while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 159.03 and 159.45 can be expected.

Sell signal

Scenario No. 1: I plan to sell USD/JPY after a break below the 158.85 level (red line on the chart), which may lead to a rapid decline in the pair. The key target for sellers will be 158.47, where I plan to exit short positions and immediately open long positions in the opposite direction (targeting a 20–25 point move). Pressure on the pair may return at any moment.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 if there are two consecutive tests of the 159.03 level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 158.85 and 158.47 can be expected.

Chart notes

• Thin green line – entry price for buying the instrument;
• Thick green line – estimated level for placing Take Profit or locking in profits, as further growth above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – estimated level for placing Take Profit or locking in profits, as further decline below this level is unlikely;
• MACD indicator: when entering the market, it is important to consider overbought and oversold zones.

Important

Beginner Forex traders should be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize losses. Without stop-loss orders, you can quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

Remember that successful trading requires a clear trading plan, like the one outlined above. Making spontaneous trading decisions based on current market conditions is generally a losing strategy for an intraday trader.