Analysis of Trades and Trading Tips for the Japanese Yen

The test of the 144.86 level occurred when the MACD indicator had just started to move upward from the zero line, confirming a valid entry point for buying the dollar and resulting in a rise of over 60 pips.

The dollar strengthened against the yen, reacting positively to Trump's statements that he plans to finalize trade deals with China and Europe soon, similar to the agreement signed with the UK the day before. The divergence in monetary policies also prompts traders to sell the yen and buy the dollar. Additionally, weak data on wage growth in Japan released today added further pressure on the yen. Despite efforts by the government and the Bank of Japan, slow wage growth remains a serious obstacle to sustained economic growth. Declining income growth reduces consumer demand and hinders the achievement of the BoJ's 2% inflation target. This labor market situation further fuels bearish sentiment toward the yen. Investors fear that the BoJ will be forced to maintain its current monetary policy even longer, which could lead to further depreciation of the Japanese currency.

For the intraday strategy, I will mainly rely on implementing scenarios #1 and #2.

Buy Scenario

Scenario #1: I plan to buy USD/JPY today upon reaching the entry point around 145.73 (green line on the chart), targeting a rise to 146.56 (thicker green line). Around 146.56, I plan to exit long positions and immediately open short positions in the opposite direction, aiming for a 30–35 pip pullback. Buying the pair is most effective after corrections and significant USD/JPY pullbacks.

Important: Before buying, ensure the MACD indicator is above the zero line and just moving upward from there.

Scenario #2: I also plan to buy USD/JPY today if the pair tests the 145.31 level twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downside potential and lead to an upward reversal. A move toward 145.73 and 146.56 can be expected.

Sell Scenario

Scenario #1: I plan to sell USD/JPY today only after a break below the 145.31 level (red line on the chart), which will likely lead to a rapid drop in the pair. The primary target for sellers will be the 144.77 level, where I plan to exit shorts and immediately open long positions in the opposite direction, targeting a 20–25 pip rebound. Downward pressure on the pair can return at any time.

Important: Before selling, make sure the MACD indicator is below the zero line and just beginning to move downward.

Scenario #2: I also plan to sell USD/JPY today if the 145.73 level is tested twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A move toward the opposite levels at 145.31 and 144.77 can be expected.

What's on the Chart:

• The thin green line represents the entry price where the trading instrument can be bought.
• The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
• The thin red line represents the entry price where the trading instrument can be sold.
• The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
• The MACD indicator should be used to assess overbought and oversold zones when entering the market.

Important Notes:

• Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
• Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.