Trade Analysis and Tips for Trading the Japanese Yen

The price test at 161.69 coincided with the moment when the MACD indicator was just beginning to move downward from the zero mark, confirming the correct entry point for selling the dollar. As a result, the pair dropped by 40 pips.

Today, the escalation regarding Iran has increased demand for safe-haven assets and pushed the dollar up against the Japanese yen. Over the weekend, American forces, at Donald Trump's order, carried out a series of strikes, hitting around 140 targets. The formal reason cited by Washington is to weaken Tehran's ability to threaten navigation in the Strait of Hormuz; however, the parties still disagree on whether the strait is open, adding to market uncertainty. The Japanese yen, in this situation, finds itself caught between two fires. As a traditional safe haven, it could benefit from a spike in tensions, but the simultaneous strengthening of the dollar and the threat of rising oil prices work against Japan, which is almost entirely dependent on energy imports. If the dollar's rise drives USD/JPY up too quickly, the issue of currency intervention may resurface, as the Bank of Japan has repeatedly intervened to prevent excessive weakening of the national currency during such stressful episodes.

As for the intraday strategy, I will primarily rely on the implementation of scenarios #1 and #2.

Buy Scenarios

Scenario #1: I plan to buy USD/JPY today at the entry point around 162.15 (green line on the chart), with a growth target of 162.39 (thicker green line on the chart). At around 162.39, I intend to exit my long positions and open short positions in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). It's preferable to return to buying the pair during corrections and serious pullbacks in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY today if there are two consecutive tests of the price at 161.97 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. We can expect a rise to the opposite levels of 162.15 and 162.39.

Sell Scenarios

Scenario #1: I plan to sell USD/JPY today only after the 161.97 level is updated (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be 161.73, where I plan to exit my shorts and immediately open longs in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Sellers will return to the market at any moment; we just need any hint from the central bank. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario #2: I also plan to sell USD/JPY today if there are two consecutive tests of the price at 162.15 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. We can expect a decline to the opposite levels of 161.97 and 161.73.

What the Chart Shows:

• The thin green line represents the entry price for buying the trading instrument;
• The thick green line is the estimated price at which to set Take Profit or lock in profits, as further upward movement is unlikely above this level;
• The thin red line is the entry price for selling the trading instrument;
• The thick red line is the estimated price at which to set Take Profit or lock in profits, as further downward movement is unlikely below this level;
• The MACD indicator. It is important to base market entries on overbought and oversold zones.

Important: Beginning traders in the Forex market must make entry decisions very cautiously. Before the release of significant fundamental reports, it is best to stay out of the market to avoid sudden price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I have presented above. Making spontaneous trading decisions based on the current market situation is fundamentally a losing strategy for intraday traders.