Trade review and tips for trading the Japanese yen

The test of the 162.64 level occurred when the MACD indicator had just begun moving downward from the zero line, confirming a valid entry point for selling the U.S. dollar. As a result, the pair declined to the target level of 162.31.

Yesterday, the U.S. dollar fell sharply against the yen after traders interpreted reports that Japanese officials may abandon the practice of providing advance notice of any planned currency interventions as a direct signal that market intervention could take place in the near future. In addition, the pair came under pressure from weak U.S. labor market data, which was significantly worse than economists had expected, highlighting the challenges the Federal Reserve could face if it returns to a more aggressive monetary policy. Given that today is a public holiday in the United States and market participants are awaiting possible intervention by the Bank of Japan, further gains in USD/JPY appear unlikely.

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

Buy scenarios

Scenario No. 1: Today, I plan to buy USD/JPY if the price reaches the entry level of 161.24 (green line on the chart), targeting a move to 162.18 (the thicker green line on the chart). Around 162.18, I plan to close long positions and open short positions, anticipating a 30-35 point move in the opposite direction. It is best to consider buying the pair only during corrections and after significant declines in USD/JPY.

Important: Before buying, make sure the MACD indicator is above the zero line and has just begun moving upward.

Scenario No. 2: I also plan to buy USD/JPY if the price tests 160.72 twice consecutively while the MACD indicator is in oversold territory. This will limit the pair's downward potential and trigger a bullish market reversal. In this case, a move toward 161.24 and 162.18 can be expected.

Sell scenarios

Scenario No. 1: Today, I plan to sell USD/JPY only after the price breaks below 160.72 (red line on the chart), which is expected to trigger a rapid decline in the pair. The primary target for sellers will be 160.00, where I intend to close short positions and immediately open long positions, anticipating a 20-25 point rebound. Sellers could return at any moment—all it would take is even the slightest signal from the central bank.

Important: Before selling, make sure the MACD indicator is below the zero line and has just begun moving downward.

Scenario No. 2: I also plan to sell USD/JPY if the price tests 161.24 twice consecutively while the MACD indicator is in overbought territory. This will limit the pair's upward potential and trigger a bearish market reversal. In this case, a decline toward 160.72 and 160.00 can be expected.

Chart explanation

• Thin green line – the entry price for opening long positions.
• Thick green line – the suggested Take Profit level or an area to manually lock in profits, as further upside beyond this level is considered unlikely.
• Thin red line – the entry price for opening short positions.
• Thick red line – the suggested Take Profit level or an area to manually lock in profits, as further downside beyond this level is considered unlikely.
• MACD indicator – when entering the market, it is important to take overbought and oversold conditions into account.

Important: Beginner Forex traders should exercise extreme caution when entering the market. It is generally advisable to stay out of the market ahead of major fundamental reports to avoid sharp price swings. If you choose to trade during news releases, always place stop-loss orders to minimize potential losses. Without stop-loss orders, you may quickly lose your entire deposit, especially if you trade large positions without applying proper money management.

Remember that successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous trading decisions based solely on the current market situation is inherently a losing strategy for an intraday trader.