Analysis of Trades and Trading Advice for the Japanese Yen

The price test of 158.43 occurred when the MACD had just started moving upward from the zero line, confirming the validity of the entry point for buying the dollar. However, the pair never made the strong upward move that was expected.

This is because the market is waiting for the July U.S. employment report, which will be the key event for the yen pair. The main focus will be the change in nonfarm employment, as well as the unemployment rate and average hourly earnings, while a speech by FOMC member Thomas Barkin will complete the agenda. Employment is considered one of the most important indicators of the state of the economy, while wage growth is directly linked to inflation; therefore, strong data increase the chances of a Fed rate hike. For the yen, such a scenario poses a risk of weakening, as a stronger dollar amid expectations of tighter Fed policy deprives the Japanese currency of support against the backdrop of the much more cautious Bank of Japan. The divergence between the approaches of the two central banks remains wide, and a strong U.S. report could once again push their monetary policies in opposite directions, which traditionally puts pressure on the yen. Weak figures, by contrast, would weaken the dollar and allow the Japanese currency to recover some of its lost ground.

As for the intraday strategy, I will focus more on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy USD/JPY when the entry point is reached around 158.46 (the green line on the chart), with a target of a rise toward 159.00 (the thicker green line on the chart). Around 159.00, I will exit the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. A rise in the pair can be expected today, but the potential is rather limited. Important! Before buying, make sure that the MACD indicator is above the zero line and has only just started rising from it.

Scenario #2: Today, I also plan to buy USD/JPY if the price tests 158.20 twice consecutively while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal upward. A rise toward the opposite levels of 158.46 and 159.00 can be expected.

Sell Signal

Scenario #1: Today, I plan to sell USD/JPY after the price breaks below 158.20 (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 157.74, where I will exit the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Downward pressure on the pair will return if the central bank intervenes. Important! Before selling, make sure that the MACD indicator is below the zero line and has only just started declining from it.

Scenario #2: Today, I also plan to sell USD/JPY if the price tests 158.46 twice consecutively while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 158.20 and 157.74 can be expected.

What Is Shown on the Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the expected price at which Take Profit can be placed or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the expected price at which Take Profit can be placed or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to use the overbought and oversold zones as a guide.

Important. Beginner Forex traders need to be very cautious when making entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire account balance very quickly, especially if you do not use proper money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making trading decisions spontaneously based on the current market situation is inherently a losing strategy for an intraday trader.