Analysis of Trades and Trading Recommendations for the Japanese Yen

The test of the 151.14 price level in the afternoon occurred when the MACD indicator had already risen significantly above the zero mark, limiting the pair's upward potential. The second test of 151.14 occurred while the MACD was in the overbought area, enabling the execution of Scenario #2 for selling and leading to a decline of more than 100 pips in the pair.

The Japanese yen appreciated against the US dollar. During today's speech by Toyoaki Nakamura, one of the most dovish members of the Bank of Japan's board, the policymaker emphasized the need for caution when adjusting monetary policy in line with the state of the economic recovery. Nakamura highlighted the importance of monitoring economic trends, stressing that careless monetary policy changes could lead to undesirable outcomes. He also noted that Japan's economic recovery remains fragile and that factors such as consumer demand and industrial production growth rate must be considered. Despite Nakamura's focus on maintaining low interest rates to stimulate investment, traders reacted differently to his remarks, continuing to anticipate a rate hike soon.

In the short term, the yen is likely to maintain high volatility as many traders still expect the BOJ to increase its interest rate soon. For my intraday strategy, I will rely more on executing Scenarios #1 and #2.

Buy Scenarios

Scenario #1:

I plan to buy USD/JPY today upon reaching the entry point around 150.09 (green line on the chart), targeting a rise to 150.72 (thicker green line). At 150.72, I intend to exit purchases and open sales in the opposite direction (aiming for a movement of 30–35 pips in the opposite direction from the level). Considering the downward trend, exercise caution with purchases. Important: Before buying, ensure that the MACD indicator is above the zero mark and starting to rise.

Scenario #2:

I also plan to buy USD/JPY today if there are two consecutive tests of the 149.62 price level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. A rise to the opposite levels of 150.09 and 150.72 can be expected.

Sell Scenarios

Scenario #1:

I plan to sell USD/JPY today only after the level of 149.62 (red line on the chart) is broken, which will lead to a sharp decline in the pair. The key target for sellers will be the level of 149.02, where I plan to exit sales and immediately open purchases in the opposite direction (aiming for a movement of 20–25 pips in the opposite direction from the level). Pressure on the pair may persist in the first half of the day. Important: Before selling, ensure that the MACD indicator is below the zero mark and starting to decline.

Scenario #2:

I also plan to sell USD/JPY today during two consecutive tests of the 150.09 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline to the opposite levels of 149.62 and 149.02 can be expected.

What's on the Chart:

• 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 Notes for Beginner Forex 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.