Analysis of Trades and Trading Tips for the Japanese Yen

The test of the 156.06 price level occurred when the MACD indicator had already moved significantly above the zero mark, clearly limiting the pair's upward potential—especially after increased market expectations regarding interest rate hikes in Japan. For this reason, I did not buy the dollar. Subsequently, there was a significant drop in the dollar, coinciding with a test of the 155.67 level and the MACD indicator beginning to move downward from the zero mark. However, I couldn't capitalize effectively on this entry point as the downward trend did not continue.

The anticipated quarter-point rate hike to 0.5% this Friday will be the largest increase since 2007. The Bank of Japan (BoJ) is confidently moving toward normalization, while the Federal Reserve (Fed) and the European Central Bank (ECB) are contemplating pausing their easing cycles. This decision reflects Japan's changing economic realities, with sustained growth and inflation finally showing signs of stabilization after a prolonged period of deflation. The BoJ's confidence is backed by successful government measures to stimulate domestic consumption and investment activity. The central bank views monetary policy normalization as essential to maintaining this positive trend.

With rate hikes in Japan, traders will likely buy the yen and sell the dollar. Preparing for this shift should start today. For intraday strategy, I will focus on implementing Scenarios #1 and #2 to continue the observed downward trend.

Buy Signal

Scenario #1: Today, I plan to buy USD/JPY at an entry point near 155.90 (green line on the chart) with a target of 156.56 (thicker green line on the chart). Around 156.56, I plan to exit purchases and open sales in the opposite direction, aiming for a 30–35 point correction from the level. The pair's growth can only be expected after new statements from Donald Trump.Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY if the price tests 155.59 twice, with the MACD indicator in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upward. Growth to 155.90 and 156.56 can be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY after the 155.59 level is updated (red line on the chart), leading to a quick drop in the pair. Sellers' key target will be 155.08, where I will exit sales and immediately open purchases in the opposite direction, aiming for a 20–25 point correction from the level. Pressure on the pair today is possible within the ongoing downward trend.Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario #2: I also plan to sell USD/JPY if the price tests 155.90 twice, with the MACD indicator in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. A decline to 155.59 and 155.08 can be expected.

Chart Details

• Thin Green Line: Entry price for buying the instrument.
• Thick Green Line: Estimated price to set Take Profit or manually lock in profits, as further growth above this level is unlikely.
• Thin Red Line: Entry price for selling the instrument.
• Thick Red Line: Estimated price to set Take Profit or manually lock in profits, as further decline below this level is unlikely.
• MACD Indicator: When entering the market, consider overbought and oversold zones.

Important Notes

Beginner Forex traders must approach market entry decisions cautiously. Before major fundamental reports are released, it is advisable to stay out of the market to avoid sudden price swings. If you decide to trade during news releases, always set stop-loss orders to minimize losses. Without stop-loss orders, you could quickly lose your entire deposit, especially if you do not practice proper money management and trade large volumes.

Remember, successful trading requires a clear trading plan, like the one outlined above. Making spontaneous trading decisions based on the current market situation is a losing strategy for intraday traders.