Analysis of Trades and Trading Tips for the Japanese Yen

The test of the 158.28 price level occurred when the MACD indicator had just started moving downward from the zero mark, confirming a valid entry point for selling the dollar. However, the pair did not experience a significant drop.

Yesterday's consumer confidence data from Japan was disappointing, but it did not lead to significant changes in market dynamics. Today, traders have already absorbed positive data regarding wage growth in Japan, which has somewhat strengthened the yen against the dollar. Wage growth is an important market indicator, suggesting a potential increase in consumer demand and inflationary pressures. This heightens the possibility that the Bank of Japan may reconsider its ultra-loose monetary policy, which would provide additional support for the yen. Meanwhile, investors are closely watching the bond market, where Japanese government bond yields have shown moderate growth. This development further emphasizes the shifts in market sentiment regarding the potential tightening of the BOJ's monetary policy.

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

Buy Signal

Scenario #1: I plan to buy USD/JPY today upon reaching the 158.44 entry point (green line on the chart) with a target of 159.11 (thicker green line). Around 159.11, I intend to exit long positions and open short positions in the opposite direction, aiming for a 30-35 pip movement away from the level. The best strategy is to bet on the pair's continued growth and buy on corrections. Important! Before buying, ensure the MACD indicator is above the zero mark and has just started to rise from it.

Scenario #2: I also plan to buy USD/JPY today if the 157.94 price level is tested twice consecutively while the MACD indicator is in oversold territory. This will limit the pair's downward potential and prompt an upward market reversal. Growth toward the opposing levels of 158.44 and 159.11 can be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY today only after breaking below the 157.94 level (red line on the chart), which could lead to a rapid decline in the pair. The key target for sellers will be the 157.25 level, where I plan to exit short positions and immediately open long positions in the opposite direction, aiming for a 20-25 pip movement away from the level. Significant pressure on the pair is unlikely to return today. Important! Before selling, ensure the MACD indicator is below the zero mark and has just started to decline from it.

Scenario #2: I also plan to sell USD/JPY today if the 158.44 price level is tested twice consecutively while the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a market reversal downward. A decline toward the opposing levels of 157.94 and 157.25 can be expected.

Chart Notes

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
• Thin red line: Entry price for selling the trading instrument.
• Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
• MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.

Important Note for Beginner Traders

• Always approach market entry decisions cautiously.
• Avoid trading during major news releases to sidestep volatile price swings.
• If trading during news releases, always set stop-loss orders to minimize losses.
• Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.
• A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous for intraday traders.