Trade Analysis and Advice for the Japanese Yen

The test of the price at 159.09 occurred when the MACD indicator was just beginning to move downward from the zero mark, confirming a valid entry point for selling the dollar, which resulted in the pair falling to the target level of 158.74.

The Japanese yen has returned to appreciating against the US dollar, although initially, traders ignored the Bank of Japan's decision to keep the base interest rate unchanged. Hints from the BoJ's leadership that its policy is increasingly taking on a hawkish tone—primarily due to the escalating situation in the Middle East—prompted a noticeable strengthening of the yen and, consequently, a decline in the US dollar. This announcement served as a wake-up call for markets that had been expecting the continuation of the previous course.

The revision of the BoJ's foreign policy rhetoric, which has traditionally been characterized by extreme caution regarding monetary policy, indicates the seriousness of its intentions. Against the backdrop of escalating conflict in the Middle East, which threatens global stability and, in particular, energy markets, the Japanese central bank seems to have decided to take preventive measures. Raising rates, even through hints, is a classic tool for combating inflationary pressure that may be triggered by rising commodity prices. The result of this communication strategy has been the immediate strengthening of the yen.

Regarding the intraday strategy, I will rely more on implementing scenarios #1 and #2.

Buy Scenarios

• Scenario #1: I plan to buy USD/JPY today at the entry point around 158.47 (the green line on the chart), with a target for growth towards 158.78 (the thicker green line on the chart). At 158.78, I plan to exit the long positions and open shorts in the opposite direction, expecting a 30-35-pip move back from the entry point. It's best to return to buying the pair during corrections and significant dips in USD/JPY. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise from it.
• Scenario #2: I also plan to buy USD/JPY today in the case of two consecutive tests of the price at 158.31, when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth to the opposite levels of 158.47 and 158.78 can be expected.

Sell Scenarios

• Scenario #1: I plan to sell USD/JPY today after the 158.31 level is updated (the red line on the chart), which may trigger a rapid decline in the pair. The key target for sellers will be the 157.85 level, where I plan to exit the shorts and immediately open longs in the opposite direction, expecting a 20-25-pip move back from the level. It is best to sell as high as possible. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning to decline from it.
• Scenario #2: I also plan to sell USD/JPY today in the case of two consecutive tests of the price at 158.47 while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decrease to the opposite levels of 158.31 and 157.85 can be expected.

What's on the Chart:

• The thin green line represents the entry price at which you can buy the trading instrument;
• The thick green line is the assumed price where you can set Take Profit or manually take profit, as further growth above this level is unlikely;
• The thin red line indicates the entry price at which you can sell the trading instrument;
• The thick red line is the assumed price where you can set Take Profit or manually take profit, as further decline below this level is unlikely;
• The MACD indicator. When entering the market, it's important to refer to the overbought and oversold zones.

Important: Beginner traders in the forex market need to make entry decisions very carefully. It is best to stay out of the market before the release of important fundamental reports to avoid sharp fluctuations in prices. If you choose to trade during the release of news, always set Stop Loss orders to minimize losses. Without placing Stop Loss orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember, successful trading requires a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.