Analysis of Trades and Trading Tips for the Japanese Yen

The test of the 144.85 price level occurred at a time when the MACD indicator had already moved significantly above the zero line, which limited the dollar's upside potential. For this reason, I did not buy the dollar.

As last Friday's data showed, the U.S. Core Personal Consumption Expenditures (PCE) index for May came in only slightly above economists' forecasts, which did not provide significant support for the dollar and allowed the Japanese yen to strengthen. The slowdown in inflation, as reflected in the personal income and expenditure report, reinforced expectations that the Federal Reserve might soon shift its monetary policy toward easing. These expectations added pressure on the dollar and supported the yen, which is traditionally considered a safe-haven asset during times of economic uncertainty.

Today's weak data on changes in industrial production and housing starts in Japan put additional pressure on the yen. A decline in industrial output signals a slowdown in economic activity in a key sector, while a drop in housing starts indicates reduced investment activity and weakening confidence in the outlook for the real estate market. These figures, released amid ongoing global economic uncertainty, raised concerns among investors about the resilience of the Japanese economy. The impact of these factors on the yen is compounded by the Bank of Japan's policy, which continues to pursue interest rate hikes.

For intraday strategy, I will focus primarily on implementing Scenarios #1 and #2.

Buy Scenario

Scenario #1: I plan to buy USD/JPY today upon reaching the entry point around 144.17 (green line on the chart), targeting a rise toward 145.05 (thicker green line on the chart). Around 145.05, I intend to exit long positions and open short ones in the opposite direction (aiming for a 30–35 point move down from that level). It is best to buy the pair on corrections and substantial pullbacks in USD/JPY.

Important! Before buying, ensure the MACD indicator is above the zero line and is just starting to rise from it.

Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the 143.77 level while the MACD indicator is in the oversold zone. This will limit the pair's downside potential and lead to a market reversal upward. A rise toward the opposite levels of 144.17 and 145.05 can be expected.

Sell Scenario

Scenario #1: I plan to sell USD/JPY today only after the 143.77 level is updated (indicated by the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be the 142.88 level, where I plan to exit short positions and immediately open long positions in the opposite direction (aiming for a 20–25 point move up from that level). Selling pressure on the pair may return quickly today.

Important! Before selling, ensure the MACD indicator is below the zero line and is just starting to decline from it.

Scenario #2: I also plan to sell USD/JPY today in the event of two consecutive tests of the 144.17 level while the MACD indicator is in the overbought zone. This will limit the pair's upside potential and lead to a downward market reversal. A drop toward the opposite levels of 143.77 and 142.88 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.