Analysis of Trades and Trading Tips for the Japanese Yen

The test of the 150.56 price level occurred when the MACD indicator had already moved significantly above the zero mark, which limited the pair's upward potential, especially in a bearish market. For this reason, I chose not to buy the dollar. However, by the middle of the U.S. session, there was another test of the 150.56 level, and this time the MACD was just beginning to move upward from the zero mark, confirming a valid market entry point. Despite this, the pair did not experience a significant increase.

Today, Japan's Manufacturing PMI data was released and came in better than economists had forecasted, but it still remained below the 50-point threshold, indicating a decline in activity. Despite this positive surprise, the overall situation remains uncertain. Japan's economy continues to face challenges, including weak global demand and rising energy prices. The only optimistic takeaway is that the rate of contraction has slowed, suggesting that Japanese businesses are gradually adapting to the new economic conditions. However, a strong return to growth would require more substantial economic stimulus measures and support for exporters.

The Bank of Japan faces a difficult task. On the one hand, it needs to support economic growth, while on the other, it must consider raising interest rates. Maintaining a loose monetary policy could help economic recovery but may also lead to further yen depreciation and higher import costs.

For intraday strategy, I will focus more on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY when the price reaches 150.56 (green line on the chart), aiming for a rise to 151.19 (thicker green line). At 151.19, I plan to exit long positions and open a short trade in the opposite direction, expecting a downward 30-35-pip correction. It is best to re-enter long trades on pullbacks and significant declines in USD/JPY. Important: Before buying, make sure the MACD indicator is above the zero mark and just beginning to rise.

Scenario #2: Another buying opportunity will arise if the price tests 150.21 twice while MACD is in the oversold area. This will limit the pair's downside potential and trigger an upward market reversal, with expected growth toward 150.56 and 151.19.

Sell Signal

Scenario #1: I plan to sell USD/JPY only after the price breaks below 150.21 (red line on the chart), which would lead to a sharp decline in the pair. The key target for sellers will be 149.60, where I plan to exit short positions and immediately open a long trade in the opposite direction, expecting a 20-25-point bounce. Selling pressure on the pair could return at any moment. Important: Before selling, make sure the MACD indicator is below the zero mark and just beginning to decline.

Scenario #2: Another selling opportunity arises if the price tests 150.56 twice while MACD is in the overbought area. This will limit the pair's upside potential and trigger a market reversal downward, with expected declines toward 150.21 and 149.60.

What's on the Chart:

• The thin green line represents the entry price where the trading instrument can be bought.
• The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
• The thin red line represents the entry price where the trading instrument can be sold.
• The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
• The MACD indicator should be used to assess overbought and oversold zones when entering the market.

Important Notes:

• Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
• Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.