Analysis of Trades and Tips for Trading the Japanese Yen

The test of the 154.55 price level occurred as the MACD indicator began to rise from the zero line, confirming a valid entry point for purchasing the dollar. However, as seen on the chart, the pair failed to make a significant upward movement. Despite the dollar's sharp weakening earlier in the day, demand for it remains strong, with Japanese officials' statements on future interest rates having little impact.

Despite efforts to influence the exchange rate, Japanese authorities have been unable to curb demand for the dollar, particularly amid global economic turbulence. This pressure is exacerbated by high interest rates in countries like the U.S., which continue to weigh on the Japanese yen. In the absence of economic data later in the day, buying the dollar during potential corrections appears to be a reasonable strategy. For intraday trading, I will focus on Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY at the 154.62 entry point (green line on the chart), targeting a rise to 155.08 (thicker green line on the chart). At 155.08, I will exit purchases and open sell positions in the opposite direction, expecting a 30-35 point downward movement. The pair is likely to rise within the prevailing uptrend.

Important: Before buying, ensure the MACD indicator is above the zero line and starting to rise.

Scenario #2: Buying USD/JPY is also viable if the 154.36 level is tested twice consecutively and the MACD indicator signals oversold conditions. This setup is expected to limit the pair's downward potential and prompt a reversal upward, targeting levels of 154.62 and 155.08.

Sell Signal

Scenario #1: I plan to sell USD/JPY after a breakout below the 154.36 level (red line on the chart), likely leading to a sharp decline. The key target for sellers is 153.87, where I will exit sales and immediately open buy positions in the opposite direction, anticipating a 20-25 point upward correction. The higher the dollar climbs, the more likely it is to face renewed selling pressure against the yen.

Important: Before selling, ensure the MACD indicator is below the zero line and starting to decline.

Scenario #2: Selling USD/JPY is also justified if the 154.62 level is tested twice consecutively and the MACD indicator signals overbought conditions. This setup is expected to cap the pair's upward potential and prompt a downward reversal, targeting levels of 154.36 and 153.87.

Chart Notes:

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: Estimated level for setting Take Profit or manually securing profits, as further growth beyond this level is unlikely.
• Thin red line: Entry price for selling the trading instrument.
• Thick red line: Estimated level for setting Take Profit or manually securing profits, as further declines below this level are unlikely.
• MACD indicator: Evaluate overbought and oversold zones before entering the market.

Important Note:

Beginner traders should approach market entry decisions cautiously. It is advisable to stay out of the market during the release of significant fundamental reports to avoid sharp price fluctuations. If trading during news events, always use stop-loss orders to limit losses. Without stop-loss orders, you risk significant losses or even the depletion of your trading account.

Successful trading requires a clear, structured plan, like the one outlined above. Making impulsive trading decisions based on short-term market conditions often leads to unfavorable outcomes for intraday traders.