Trade Review and Tips for Trading the Japanese Yen

The test of the 162.65 level occurred when the MACD indicator had already moved significantly below the zero line, limiting the pair's downward potential. A second test of 162.65 triggered Buy Scenario No. 2, resulting in only a modest 10-point gain.

Attention now turns to the release of fresh U.S. labor market data. The June ADP Employment Change report and the ISM Manufacturing PMI will be published shortly. These macroeconomic indicators are of primary importance in shaping the Federal Reserve's future monetary policy.

The ADP report, released ahead of the official U.S. employment data, will provide an early indication of employment trends in the private sector. Strong figures could support further gains in the U.S. dollar against the Japanese yen, although any upside is likely to be limited by concerns over potential intervention by the Bank of Japan. The ISM Manufacturing PMI will provide an assessment of conditions in the U.S. manufacturing sector, an important driver of economic activity. As a rule, a reading above 50 signals expansion in the sector, while a reading below 50 indicates contraction.

Particular attention will be focused on the speech by FOMC Chairman Kevin Warsh. Market participants will closely analyze his comments on the current economic outlook, inflation prospects, and the future path of interest rates. Any indication that the Federal Reserve remains prepared to raise rates would likely support a further advance in USD/JPY.

As for my intraday strategy, I will primarily rely on the implementation of Scenario No. 1 and Scenario No. 2.

Buy Signal

Scenario No. 1: I plan to buy USD/JPY if the price reaches the entry level around 162.78 (the green line on the chart), with a target at 163.08 (the thicker green line on the chart). Around 163.08, I plan to close long positions and immediately consider opening short positions, expecting a 30–35 point move in the opposite direction. The pair may continue to rise today, although any gains are likely to be relatively limited. Important: Before buying, make sure the MACD indicator is above the zero line and has just begun moving higher.

Scenario No. 2: I also plan to buy USD/JPY if the price tests 162.64 twice consecutively while the MACD indicator is in oversold territory. This would limit the pair's downward potential and trigger a bullish market reversal. In this case, the pair may rise toward 162.78 and 163.08.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY after the price breaks below 162.64 (the red line on the chart), which should trigger a rapid decline in the pair. The primary downward target is 162.31, where I plan to close short positions and immediately consider opening long positions, expecting a 20–25 point rebound. Selling pressure is likely to return if the Bank of Japan intervenes. Important: Before selling, make sure the MACD indicator is below the zero line and has just begun moving lower.

Scenario No. 2: I also plan to sell USD/JPY if the price tests 162.78 twice consecutively while the MACD indicator is in overbought territory. This would limit the pair's upward potential and trigger a bearish market reversal. In this case, the pair may decline toward 162.64 and 162.31.

Chart Guide

• Thin green line – the suggested entry price for long positions.
• Thick green line – the suggested Take Profit level or an area to lock in profits manually, as further gains above this level are considered unlikely.
• Thin red line – the suggested entry price for short positions.
• Thick red line – the suggested Take Profit level or an area to lock in profits manually, as further declines below this level are considered unlikely.
• MACD indicator – when entering the market, pay close attention to overbought and oversold conditions.

Important: Beginner Forex traders should exercise caution when entering the market. It is generally advisable to stay out of the market ahead of major fundamental data releases to avoid sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly result in the loss of your entire trading account, particularly if you trade large position sizes without applying proper risk management.

Finally, remember that successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous trading decisions based solely on current market conditions is generally a losing strategy for intraday traders.