Analysis of Trades and Tips for Trading the Japanese Yen

The price test at 159.23 coincided with the moment when the MACD indicator was just starting to move up from the zero mark, confirming the correct entry point for buying the dollar. As a result, the pair rose by 20 pips.

The dollar strengthened on a mixed U.S. report, where economic slowdown was offset by inflation that is comfortable for the Federal Reserve. GDP in the second quarter increased by only 1.5% compared to 2.1% in the first quarter, while the PCE price index and the core index rose by 0.2% month-on-month, with annual figures of 3.7% and 3.3%, respectively. As all figures fell within the forecasts, the absence of surprises did not provoke sharp fluctuations, and the dollar appreciated moderately. For the yen, the moderate strengthening of the dollar resulted in slight pressure, as even a calm report supported the American currency amid a much more cautious Bank of Japan. The gap between the two central banks' approaches remains wide, and as long as U.S. inflation remains notably higher than Japan's, the USD/JPY pair tends to remain elevated.

Regarding the intraday strategy, I will rely more on implementing Scenarios No. 1 and No. 2.

Buying Scenarios

Scenario No. 1: I plan to buy USD/JPY today when the entry point reaches around 159.43 (the green line on the chart) with the aim of rising to the level of 159.74 (the thicker green line on the chart). At 159.74, I plan to exit the long positions and sell in the opposite direction, anticipating a move of 30-35 pips from the entry point. It is best to resume buying the pair during corrections and significant pullbacks in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning its upward movement from there.

Scenario No. 2: I also plan to buy USD/JPY today in the event of two consecutive tests of 159.27, with the MACD indicator in the oversold area. This will limit the downside potential of the pair and lead to an upward market reversal. One can expect a rise to the opposite levels of 159.43 and 159.74.

Selling Scenarios

Scenario No. 1: I plan to sell USD/JPY today only after the 159.27 level (the red line on the chart) is updated, which will trigger a quick decline in the pair. The key target for sellers will be 158.96, where I plan to exit the short positions and immediately buy in the opposite direction, anticipating a move of 20-25 pips from that level. Sellers will return at any moment; it only requires a hint from the central bank. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning its downward movement from there.

Scenario No. 2: I also plan to sell USD/JPY today if there are two consecutive tests of 159.43 while the MACD indicator is in the overbought area. This will limit the upside potential of the pair and lead to a downward market reversal. One can expect a decline to the opposing levels of 159.27 and 158.96.

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.