Analysis of Trades and Trading Tips for the Japanese Yen
The first test of the 144.11 level occurred when the MACD indicator had already moved significantly below the zero line, which limited the dollar's downside potential.
Yesterday's final U.S. GDP data for the first quarter were revised downward to a contraction of 0.5%, compared to the previously reported 0.2% expansion. This exerted notable pressure on the U.S. dollar. The market's reaction is explained by the fact that a slowdown in U.S. economic growth increases the likelihood of further monetary easing by the Federal Reserve.
Today's data showed that Japan's unemployment rate remained unchanged at 2.5%, which preserved demand for the Japanese yen and slightly weakened the dollar's position. Labor market stability in Japan serves as a key factor supporting the yen's attractiveness to investors. Amid global economic uncertainty and recession fears across various regions, the resilience of Japan's economy—including the labor market—strengthens the yen's role as a safe-haven currency. Limited demand for the dollar, due to the absence of positive drivers, also contributes to the yen's strengthening. Investors concerned about the outlook for the U.S. economy are seeking alternative options to preserve capital, which puts pressure on the dollar and supports demand for the yen.
For intraday strategy, I will focus primarily on implementing Scenarios #1 and #2.
Buy Scenario
Scenario #1: I plan to buy USD/JPY today at an entry point around 144.59 (indicated by the green line on the chart), targeting a rise toward 145.59 (represented by the thicker green line). Near 145.59, I intend to exit long positions and open shorts in the opposite direction (expecting a 30–35 pip pullback from that level). It's best to return to buying this pair during corrections and deeper pullbacks.
Important! Before buying, ensure the MACD indicator is above the zero line and just beginning to rise from it.
Scenario #2: I also plan to buy USD/JPY in the case of two consecutive tests of the 144.21 level when the MACD is in the oversold area. This will limit the pair's downside potential and trigger an upward reversal. A rise toward 144.59 and 145.59 can then be expected.
Sell Scenario
Scenario #1: I plan to sell USD/JPY only after a break below 144.21 (red line on the chart), which should lead to a rapid decline. The key target for sellers will be 143.34, where I plan to exit shorts and immediately open long positions (expecting a 20–25 pip rebound). Selling pressure on the pair may return quickly today.
Important! Before selling, ensure the MACD indicator is below the zero line and just starting to decline from it.
Scenario #2: I also plan to sell USD/JPY if there are two consecutive tests of the 144.59 level while the MACD is in the overbought zone. This would limit the pair's upside potential and trigger a downward reversal. A decline toward 144.21 and 143.34 can be expected.
What's on the Chart:
- The thin green line represents the entry price where the trading instrument can be bought.
- The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
- The thin red line represents the entry price where the trading instrument can be sold.
- The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
- The MACD indicator should be used to assess overbought and oversold zones when entering the market.
Important Notes:
- Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to 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 wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
- Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.
