Analysis of Trades and Trading Tips for the Japanese Yen

The 153.94 price test occurred when the MACD indicator had moved significantly above the zero mark, limiting the pair's upward potential. For this reason, I chose not to buy the dollar. Shortly thereafter, another test of 153.94 took place while the MACD indicator was in the overbought area, enabling Scenario #2 for selling. As a result, the pair dropped to the target level of 151.31, where bounce-back buying yielded an additional 30 pips of profit.

Today's strong trade balance figures have helped the Japanese yen to strengthen against the dollar. Most likely, pressure on the dollar will persist until the Federal Reserve announces its decision on interest rates. The yen's appreciation, supported by positive trade balance data, reflects investor confidence in the Japanese economy. This metric, which measures the difference between exports and imports, has become a significant indicator of demand for the yen. Moreover, steady growth in Japanese exports bolsters interest in the yen as a safe-haven asset, especially given the uncertainty surrounding the Bank of Japan's future policy.

While the yen remains in demand, the dollar faces pressure ahead of the Federal Reserve's interest rate decision. Traders will closely monitor the central bank's statements, as any hints about future changes in monetary policy could lead to significant currency fluctuations.

For the intraday strategy, I plan to rely primarily on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy USD/JPY at the entry point near 153.50 (green line on the chart) with a target of rising to the 153.90 level (thicker green line). Around 153.90, I will exit purchases and open sales in the opposite direction (expecting a move of 30–35 pips from the level). Considering the solid correction, demand for the dollar may return quickly. Important: Before buying, ensure the MACD indicator is above the zero line and beginning to rise.

Scenario #2: I also plan to buy USD/JPY today in case of two consecutive tests of the 153.19 price when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upwards. Growth to the opposing levels of 153.50 and 153.90 can be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY today only after the 153.19 level (red line on the chart) is breached, which will lead to a quick decline in the pair. The key target for sellers will be 152.84, where I plan to exit sales and immediately open purchases in the opposite direction (expecting a move of 20–25 pips in the opposite direction). Pressure on the pair may return today only after failing to hold at a new daily high. Important: Before selling, ensure the MACD indicator is below the zero line and just beginning to decline from it.

Scenario #2: I also plan to sell USD/JPY today in case of two consecutive tests of the 153.50 price when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decline to the opposing levels of 153.19 and 152.84 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.