Trade Review and Guidance for Trading the Japanese Yen

The test of the 148.61 price level occurred when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential.

In the second half of the day, a significant amount of macroeconomic data is expected. First, reports on the construction sector will be released, including building permits and housing starts. This will be followed by data from the University of Michigan on consumer sentiment and inflation expectations. These indicators reflect the current state of the economy and provide insight into likely trends.

Building permits and housing starts are highly important. An increase in these figures signals optimism from construction companies and buyers, suggesting a positive outlook on economic prospects. Conversely, a decline indicates a potential slowdown in economic growth and a possible approach of a recession. The University of Michigan's Consumer Sentiment Index is also a key indicator, reflecting people's willingness to spend and use services. High confidence supports economic growth, while low confidence leads to decreased demand and reduced production. Inflation expectations, in turn, influence business and investor decisions.

If the data is strong, the USD/JPY pair is likely to continue rising. If the figures match expectations, the pair may remain range-bound.

As for the intraday strategy, I will mostly rely on the implementation of scenarios #1 and #2.

Buy Signal

Scenario #1: Today I plan to buy USD/JPY at the entry point around 148.64 (green line on the chart), targeting a rise to 149.04 (thicker green line on the chart). Around 149.04, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point reversal). A solid rise in the pair can be expected if the upward trend continues. Important: Before buying, make sure the MACD indicator is above the zero line and just beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY today if the price tests 148.36 twice in a row, with the MACD indicator in oversold territory. This would limit the pair's downward potential and trigger a reversal to the upside. A rise toward the opposing levels of 148.64 and 149.04 may follow.

Sell Signal

Scenario #1: I plan to sell USD/JPY today after a break below the 148.36 level (red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 148.02, where I plan to exit short positions and open long positions in the opposite direction (expecting a 20–25 point rebound). Downward pressure on the pair may increase if U.S. data is very weak. Important: Before selling, make sure the MACD indicator is below the zero line and just beginning to fall from it.

Scenario #2: I also plan to sell USD/JPY today if the price tests 148.64 twice in a row, with the MACD indicator in overbought territory. This would limit the pair's upward potential and trigger a reversal downward. A decline toward the opposing levels of 148.36 and 148.02 can be expected.

Chart Legend:

• Thin green line – entry price for buying the instrument
• Thick green line – suggested level for setting Take Profit or manually locking in profit, as further growth above this level is unlikely
• Thin red line – entry price for selling the instrument
• Thick red line – suggested level for setting Take Profit or manually locking in profit, as further decline below this level is unlikely
• MACD Indicator – it's essential to follow overbought and oversold zones when entering the market

Important: Beginner Forex traders must be extremely cautious when deciding to enter the market. Before the release of major fundamental reports, it is best to stay out of the market to avoid sharp exchange rate fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit—especially if you neglect money management and trade with large volumes.

And remember, successful trading requires a clear plan, like the one I presented above. Making spontaneous trading decisions based on current market conditions is a losing strategy for intraday traders.