Analysis of Trades and Trading Tips for the Japanese Yen

The test of the 144.02 level occurred when the MACD indicator had already moved significantly above the zero mark, limiting the pair's upside potential. For this reason, I did not buy the dollar.

Yesterday's decent ISM services activity data from the U.S. sparked some dollar buying, but it did not lead to any major shift in the balance of power within the USD/JPY pair. Instead, it triggered a short-lived impulse that quickly faded, giving way to the prevailing market sentiment. Despite occasional positive signals, investors remain cautious about the U.S. economy's outlook.

In the medium term, the trend still favors buyers, as the Bank of Japan's refusal to continue raising interest rates, primarily due to U.S. trade tariffs, has negatively impacted the yen and provided greater support to the dollar than before. This creates an opportunity for traders focused on long-term positions. The yen's weakness, exacerbated by geopolitical tensions, opens the door to acquiring dollar-denominated assets at more favorable prices. It's important to note that this is not about short-term speculative trades but strategic investing grounded in fundamental analysis and macroeconomic understanding.

For intraday strategy, I will focus primarily on implementing Scenarios #1 and #2.

Buy Scenario

Scenario #1: I plan to buy USD/JPY today at the entry point around 143.95 (green line on the chart) with a target of 144.54 (thicker green line). Around 144.54, I intend to exit long positions and open short positions in the opposite direction, aiming for a 30–35 pip pullback from that level. It's best to return to buying this pair during corrections and significant pullbacks in USD/JPY. Important: Before buying, ensure that the MACD indicator is above the zero line and beginning to rise.

Scenario #2: I also plan to buy USD/JPY today if there are two consecutive tests of the 143.67 level when the MACD is in oversold territory. This would limit the pair's downside potential and trigger a reversal to the upside. A rise toward the opposite levels of 143.95 and 144.54 can be expected.

Sell Scenario

Scenario #1: I plan to sell USD/JPY today only after a break below 143.67 (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be 143.15, where I intend to exit short positions and immediately open long positions in the opposite direction, aiming for a 20–25 pip rebound from that level. Strong downside pressure on the pair is unlikely today. Important: Before selling, ensure that the MACD indicator is below the zero line and starting to decline.

Scenario #2: I also plan to sell USD/JPY today if there are two consecutive tests of the 143.95 level when the MACD is in overbought territory. This will limit the pair's upside potential and prompt a reversal to the downside. A decline toward the opposite levels of 143.67 and 143.15 is then 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.