Analysis of Trades and Trading Tips for the Japanese Yen

The test of the 153.91 price level in the second half of the day occurred when the MACD indicator had already moved significantly above the zero mark, limiting the pair's upward potential. For this reason, I missed the entire upward movement. According to Scenario #2, selling on a rebound from the 154.40 level resulted in approximately 30 pips of profit.

Yesterday's decline in the Japanese yen amid weak U.S. Manufacturing PMI data was surprising. This highlights that movements in this pair are increasingly driven by Japanese macroeconomic data and the Bank of Japan's policies. On Thursday, The central bank will likely announce that it will maintain its current interest rates, contrary to earlier expectations from economists and traders for a potential rate hike by the end of the year.

The Japanese central bank appears determined to stick to its strategy of maintaining monetary stability, a decision that seems quite controversial. The expected decision to keep rates unchanged may lead to further yen weakening, especially if other central banks, such as the Federal Reserve, announce more conservative measures regarding rate cuts for next year. Investors will closely monitor upcoming statements from the BOJ to assess how their policies might influence future currency trends.

As for the intraday strategy, I will rely more on executing Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today if the entry point reaches 154.18 (green line on the chart) with a target of rising to 154.71 (thicker green line). Around 154.71, I plan to exit purchases and open sell positions in the opposite direction (expecting a movement of 30-35 pips downward from the level). Given the upward trend, it is logical to trade in line with the trend.

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

Scenario #2: I also plan to buy USD/JPY today in case of two consecutive tests of the 153.83 level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and trigger an upward market reversal. Growth can be expected toward the opposite levels of 154.18 and 154.71.

Sell Signal

Scenario #1: I plan to sell USD/JPY today only after breaking below the 153.83 level (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 153.31, where I plan to exit sales and immediately open buy positions in the opposite direction (expecting a movement of 20-25 pips upward from the level). Selling pressure on the pair may return today only after failing to consolidate near the new daily high.

Important! Before selling, ensure that the MACD indicator is below the zero mark and starting to decline from it.

Scenario #2: I also plan to sell USD/JPY today in case of two consecutive tests of the 154.18 level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and trigger a market reversal downward. A decline can be expected toward the opposite levels of 153.83 and 153.31.

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.