Trade Analysis and Strategy Tips for the Japanese Yen

The first test of the 142.66 level occurred when the MACD indicator had already dropped significantly below the zero line, which limited the pair's downward potential. For that reason, I chose not to sell the dollar. The second test of 142.66 happened when the MACD was in oversold territory, which enabled Scenario #2 for buying to unfold. However, as you can see on the chart, the pair failed to show any significant upward momentum.

Today in the second half of the day, investors and traders will focus on key U.S. macroeconomic indicators related to the labor and housing markets. We are expecting weekly initial jobless claims and existing home sales data. A rise in jobless claims could signal a slowdown in hiring and a deteriorating economic outlook, while a decline would indicate labor market resilience.

The existing home sales report is an important indicator of the real estate market and consumer confidence. An increase in sales volume usually reflects growing housing demand and improving economic prospects, while a decrease may suggest market weakness and potential economic risks.

Together, these reports can provide valuable insights into the current state and outlook of the U.S. economy. Strong data would increase demand for the dollar, leading to a rise in the USD/JPY pair.

For intraday strategy, I'll continue to focus on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today after reaching the entry point around 142.60 (green line on the chart), with a target of 143.12 (thicker green line). At 143.12, I plan to exit long positions and open short ones in the opposite direction, expecting a 30–35 point pullback. Buying the pair today only makes sense after very strong U.S. data. Important! Before entering a buy trade, ensure the MACD indicator is above the zero mark and just beginning to rise.

Scenario #2: I also plan to buy USD/JPY if there are two consecutive tests of the 142.29 level when the MACD indicator is in the oversold zone. This would limit the pair's downward potential and lead to a reversal. We can expect growth toward the 142.60 and 143.12 levels.

Sell Signal

Scenario #1: I plan to sell USD/JPY after breaking below 142.29 (red line on the chart), which would likely result in a sharp drop. The main target will be 141.73, where I plan to exit short trades and immediately open longs in the opposite direction, expecting a 20–25 point rebound. Downward pressure may return at any moment today. Important! Before selling, make sure the MACD is below zero and just starting to decline.

Scenario #2: I also plan to sell USD/JPY if there are two consecutive tests of 142.60 while the MACD is in overbought territory. This will cap the pair's upward potential and trigger a downward reversal. A drop toward 142.29 and 141.73 can be expected.

Chart Key:

• Thin green line – entry point for long positions
• Thick green line – suggested Take Profit level or area to lock in profits, as further growth is unlikely above this level
• Thin red line – entry point for short positions
• Thick red line – suggested Take Profit level or area to lock in profits, as further decline is unlikely below this level
• MACD Indicator – use overbought and oversold areas as reference when entering trades

Important: Beginner Forex traders should be very cautious when entering the market. It's best to stay out before major economic reports are released to avoid sudden price swings. If you decide to trade during news events, always set stop-loss orders to minimize losses. Without stop-losses, your entire deposit can be lost very quickly—especially if you don't follow money management and trade with large volumes.

And remember: successful trading requires a clear trading plan like the one provided above. Making spontaneous trading decisions based on current market movements is a losing strategy for intraday traders.