Analysis of Trades and Tips for Trading the Japanese Yen

The test of the 143.26 level occurred when the MACD indicator had been in the oversold territory for a significant duration, forming a divergence and creating favorable conditions for buying the dollar in anticipation of a recovery. As a result, the pair rose by more than 40 points and reached the 143.69 level. The second half of the day may once again be dominated by dollar buyers, similar to the end of last week. This may be influenced by strong data from the U.S. Manufacturing PMI, Services PMI, and statements from Federal Reserve representatives, including FOMC member Raphael Bostic, Austan Goolsbee, and Neel Kashkari. A cautious tone from these policymakers may lead to dollar buying and yen selling; however, this trend is unlikely to be sustained, making a prolonged rise in the pair improbable. Regarding my intraday strategy, I plan to act based on the realization of Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today at the entry point around 143.76 (green line on the chart) with a target of reaching 144.24 (thicker green line on the chart). Around 144.24, I will exit my long positions and open shorts in the opposite direction (anticipating a 30-35 point move in the opposite direction). The pair is expected to rise today only if supported by strong U.S. data. Important: Before buying, ensure that the MACD indicator is above the zero mark and has begun to rise.

Scenario #2: I also plan to buy USD/JPY today if there are two consecutive tests of the 143.45 level when the MACD indicator is in the oversold zone. This will restrict the pair's downward movement and prompt an upward market reversal. A rise towards the target levels of 143.76 and 144.24 is expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY today after the 143.45 level (red line on the chart) is breached, which will likely lead to a rapid decline in the pair. The primary target for sellers will be the 143.00 level, where I intend to exit my short positions and immediately open long ones (expecting a 20-25 point move in the opposite direction). Selling pressure on the pair will likely return if buyers show no activity around the daily high. Important: Before selling, ensure that the MACD indicator is below the zero mark and has started to decline.

Scenario #2: I also plan to sell USD/JPY today if there are two consecutive tests of the 143.76 level when the MACD indicator is in the overbought zone. This will limit the pair's upward momentum and result in a downward market reversal. A decline towards the target levels of 143.45 and 143.00 is anticipated.

Chart Details:

• Thin green line – the entry level where buying the trading instrument is recommended.
• Thick green line – the estimated level where you can set Take Profit or manually secure profits, as further growth beyond this level is unlikely.
• Thin red line – the entry level where selling the trading instrument is recommended.
• Thick red line – the estimated level where you can set Take Profit or manually secure profits, as further decline beyond this level is unlikely.
• MACD Indicator – It's essential to consider overbought and oversold zones when entering the market.

Important Note:

Beginner Forex traders must exercise caution when making market entry decisions. It's advisable to stay out of the market before the release of significant fundamental reports to avoid sudden price swings. If you decide to trade during news releases, always set stop orders to minimize potential losses. Without stop orders, you risk quickly depleting your entire deposit, especially if you do not implement sound money management practices and trade in large volumes.

Remember, successful trading requires a clear trading plan, as demonstrated above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.