Deal Analysis and Tips for Trading the Japanese Yen

The test of the price level at 155.85 coincided with the MACD indicator beginning to move downward from the zero mark, confirming a good entry point to sell the dollar. However, after a decline of 10 pips, the pressure eased at the end of the week.

The US dollar showed resilience against the Japanese yen at the end of last week amid cautious remarks from Federal Reserve officials. These statements essentially kept the possibility of further monetary policy easing open, although the timing of the next easing has become unclear. Meanwhile, the Japanese yen remains in demand, as was evident during today's Asian session. The sharp decline in USD/JPY once again indicates the likelihood of the Bank of Japan tightening monetary policy this week, which could narrow the interest rate gap between the US and Japan.

The market will continue to closely monitor any hints of changes in central banks' rhetoric. When market participants' expectations about central banks' future actions are so strong, even slight nuances in statements can lead to significant fluctuations in currency exchange rates.

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

Buy Scenarios

Scenario #1: I plan to buy USD/JPY today when it reaches the entry point around 155.28 (green line on the chart), targeting a move to 155.66 (thicker green line on the chart). At around 155.66, I plan to exit my long positions and open short positions in the opposite direction, anticipating a movement of 30-35 pips back from that level. It is best to return to buying the pair on corrections and significant dips in USD/JPY. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning an upward move.

Scenario #2: I also plan to buy USD/JPY today if the price level at 154.90 is tested twice while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. A rise toward the opposite levels of 155.28 and 155.66 can be expected.

Sell Scenarios

Scenario #1: I plan to sell USD/JPY today only after it breaks the 154.90 level (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 154.50 level, where I intend to exit my shorts and immediately open longs in the opposite direction, anticipating a 20-25-pip move back from that level. It is advisable to sell as high as possible. Important! Before selling, ensure the MACD indicator is below the zero mark and just starting its downward move.

Scenario #2: I also plan to sell USD/JPY today if the price level at 155.28 is tested twice consecutively while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline toward the opposite levels of 154.90 and 154.50 can be anticipated.

What's on the Chart:

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

Important: Beginner traders in the Forex market need to make entry decisions with great caution. It is best to stay out of the market before significant fundamental reports to avoid sudden price fluctuations. If you choose to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember, successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for the intraday trader.