Analysis of Trades and Trading Tips for the Japanese Yen

The test of the 147.40 level occurred just as the MACD indicator began moving upward from the zero line, confirming a valid entry point for buying the dollar, which led to a rise of more than 35 pips.

Given the lack of progress in trade negotiations between the U.S. and Japan, and the high tariffs set to take effect on August 1, the yen continues to weaken against the U.S. dollar. Investors fear that a trade war between the world's two largest economies could negatively impact global economic growth, and the yen—traditionally a safe-haven currency—is losing its appeal. An additional factor pressuring the yen is the Bank of Japan's dovish monetary policy. While the Federal Reserve maintains a hawkish stance, the BOJ remains cautious, despite having initiated rate hikes earlier this year. This divergence in monetary policy between the two countries creates favorable conditions for the U.S. dollar to strengthen against the yen. In the short term, the pair's dynamics will depend on news from the trade front. If negotiations between the U.S. and Japan stall and the tariffs are implemented, the yen may continue to decline. However, if an agreement is reached, the yen could rebound.

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

Buy Scenario

Scenario #1: Today, I plan to buy USD/JPY at the entry point near 147.78 (green line on the chart), targeting a rise to 148.10 (thicker green line). Around the 148.10 level, I intend to exit long positions and open shorts in the opposite direction, aiming for a 30–35 pip pullback. It's best to return to buying on corrections and significant dips in USD/JPY.

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

Scenario #2: I also plan to buy USD/JPY today if the 147.56 level is tested twice in a row while the MACD indicator is in the oversold area. This would limit the pair's downside potential and lead to an upward market reversal. A rise toward the opposite levels of 147.78 and 148.10 can be expected.

Sell Scenario

Scenario #1: Today, I plan to sell USD/JPY only after a break below the 147.56 level (red line on the chart), which could trigger a quick decline in the pair. The key target for sellers will be 147.23, where I plan to exit short positions and immediately open longs in the opposite direction, aiming for a 20–25 pip rebound from that level. Strong pressure on the pair is unlikely today.

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

Scenario #2: I also plan to sell USD/JPY today if the 147.78 level is tested twice in a row while the MACD indicator is in the overbought zone. This would limit the pair's upside potential and trigger a downward market reversal. A decline toward the opposite levels of 147.56 and 147.23 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.