Analysis of Trades and Trading Tips for the Japanese Yen

Yesterday's significant strengthening of the dollar against risk assets did not noticeably impact the Japanese yen. The USD/JPY pair remains within its horizontal channel, following substantial dollar purchases observed late last year. Clearly, the Bank of Japan's wait-and-see approach continues to negatively affect the national currency, resulting in further weakness against the dollar.

This weakness of the yen, driven by the BOJ's policy of maintaining low interest rates, poses significant challenges for the Japanese economy. Traders are pursuing more attractive yields in other markets, leading to capital outflows from Japan. The lack of changes in circumstances and the absence of clear signals regarding potential rate hikes further exacerbate this trend. Additionally, the yen's continuous depreciation contributes to rising import prices, which may create inflationary pressures within the country. This situation adds more strain on households and businesses that are already struggling with increasing costs.

For intraday strategies, I will primarily rely on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy USD/JPY at an entry point around 157.39 (green line on the chart), targeting growth to 157.94 (thicker green line). Around 157.94, I will exit the purchase and open short positions for a potential 30–35 pip move in the opposite direction. The best strategy is to anticipate further pair growth and buy on corrections. Important! Before buying, ensure that the MACD indicator is above the zero mark and beginning to rise.

Scenario #2: I also plan to buy USD/JPY today in case of two consecutive tests of the 157.03 level when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. Growth to the opposing levels of 157.39 and 157.94 can be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY today only after the price breaks below the 157.03 level (red line on the chart), likely leading to a quick decline. The key target for sellers will be 156.47, where I will exit the short position and immediately open purchases in the opposite direction, expecting a 20–25 pip move upward from that level. Selling pressure could return to the pair at any moment. Important! Before selling, ensure that the MACD indicator is below the zero mark and beginning to decline.

Scenario #2: I also plan to sell USD/JPY today in case of two consecutive tests of the 157.39 level when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. A decline to the opposing levels of 157.03 and 156.47 can be expected.

Chart Notes

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
• Thin red line: Entry price for selling the trading instrument.
• Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
• MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.

Important Note for Beginner Traders

• Always approach market entry decisions cautiously.
• Avoid trading during major news releases to sidestep volatile price swings.
• If trading during news releases, always set stop-loss orders to minimize losses.
• Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.
• A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous for intraday traders.