Analysis of Trades and Tips for Trading the Japanese Yen

The test of the 161.02 price level occurred when the MACD indicator started to move up from the zero mark, confirming the correct entry point for buying the dollar to continue the upward trend. However, as you can see on the chart, the upward trend did not develop, and it is unlikely to do so before the speeches from Fed representatives. For this reason, I decided to exit the market and prepare a new strategy. Considering the upcoming fiery speech by Fed Chairman Jerome Powell, it is best to act according to the circumstances. A strong stance on fighting inflation will likely trigger a new sell-off in the yen, leading to a rise in USD/JPY in continuation of the upward trend. If Powell is not as stringent in his statements, pressure on the dollar may quickly return, leading to another drop in USD/JPY to last week's lows. Regarding the intraday strategy, I plan to act based on the implementation of scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy USD/JPY upon reaching the entry point around 161.23 (green line on the chart), with the target of rising to 161.80 (thicker green line). Around 161.80, I will exit the purchases and open sales in the opposite direction (expecting a movement of 30-35 points in the opposite direction from the level). After the Fed's strong stance, you can count on the pair's growth today. Important! Before buying, ensure the MACD indicator is above the zero mark and just starting to rise from it.

Scenario #2: Today, I also plan to buy USD/JPY for two consecutive tests of the 160.90 price when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. Growth can be expected to the opposite levels of 161.23 and 161.80.

Sell Signal

Scenario #1: Today, I plan to sell USD/JPY after updating the level of 160.89 (red line on the chart), leading to a quick decline in the pair. The key target for sellers will be 160.16, where I will exit the sales and immediately open purchases in the opposite direction (expecting a movement of 20-25 points in the opposite direction from the level). Pressure on the pair will return in case of Powell's dovish rhetoric. Important! Before selling, make sure the MACD indicator is below the zero mark and just starting its decline from it.

Scenario #2: Today, I also plan to sell USD/JPY in the case of two consecutive tests of the 161.23 price when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline can be expected to the opposite levels of 160.89 and 160.16.

What's on the Chart:

• Thin green line – entry price at which you can buy the trading instrument;
• Thick green line – the assumed price where you can set Take Profit or independently fix profits, as further growth above this level is unlikely;
• Thin red line – entry price at which you can sell the trading instrument;
• Thick red line – the assumed price where you can set Take Profit or independently fix profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important. Beginner forex traders need to be very cautious when making market entry decisions. It is best to stay out of the market before releasing important fundamental reports to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember, for successful trading, you need to have a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.