Trade Analysis and Tips for Trading the Japanese Yen

The price test at 159.24 occurred when the MACD indicator had moved significantly above the zero mark, limiting the pair's upside potential.

Strong U.S. data supported the dollar in the afternoon, with the key driver being the Empire State manufacturing index, which surged to its highest level in over four years. The housing market provided a more subdued signal, as the NAHB builder sentiment index increased by only 1 point to 35 and remained in the pessimistic zone. However, the strength in manufacturing outweighed this, bolstering the dollar on the back of rising expectations regarding the economy's resilience. For the yen, the dollar's strengthening put pressure, as strong U.S. data widened the gap between the more cautious Bank of Japan and the Federal Reserve. This difference has traditionally weakened the Japanese currency, and against the backdrop of positive data, the USD/JPY pair had reason to rise.

Regarding the intraday strategy, I will focus more on implementing scenarios No. 1 and No. 2.

Buy Scenarios

• Scenario No. 1: I plan to buy USD/JPY today when it reaches around 159.83 (green line on the chart), targeting a move to 160.14 (thicker green line on the chart). At around 160.14, I intend to exit my long positions and sell in the opposite direction, expecting movement of 30-35 pips from the entry point. It is best to return to buying the pair during corrections and significant pullbacks of USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting its rise from it.
• Scenario No. 2: I also plan to buy USD/JPY today in the event of two consecutive tests of 159.64, with the MACD indicator in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth can be expected towards the opposite levels of 159.83 and 160.14.

Sell Scenarios

• Scenario No. 1: I plan to sell USD/JPY today only after updating the level of 159.64 (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the level of 159.36, where I intend to exit my short positions and immediately buy in the opposite direction, expecting movement of 20-25 pips in the opposite direction from the level. Sellers could return at any moment; only a hint from the central bank is needed. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting its decline from it.
• Scenario No. 2: I also plan to sell USD/JPY today if there are two consecutive tests of 159.83 while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a downward market reversal. A decline can be expected towards the opposite levels of 159.64 and 159.36.

What the Chart Shows:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price where take profit can be set, or profit can be realized, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated price where take profit can be set, or profit can be realized, 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 make entry decisions very cautiously. Before key fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not practice money management and trade large volumes.

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