Analysis of Trades and Trading Tips for the Japanese Yen

The price test at 145.40 occurred when the MACD indicator dropped significantly below the zero mark, limiting the pair's downside potential. For this reason, I did not sell the dollar.

Today's data showing a decline in Japan's overall inflation from 3.6% to 3.5% went largely unnoticed by traders. Meanwhile, the core Consumer Price Index (excluding fresh food) jumped from 3.5% to 3.7% above economists' forecasts. This divergence between indicators created some uncertainty in the market, explaining the muted response to the release. On the one hand, the overall slowdown in inflation would seemingly reduce pressure on the Bank of Japan to tighten monetary policy. On the other hand, the rise in the core index, which reflects more persistent inflationary pressure, could push the central bank toward more decisive actions.

The market is likely awaiting clearer signals from the BoJ and additional macroeconomic data before forming a firm view on the future trajectory of monetary policy. It's important to note that the current market indifference to today's data may be temporary. Upcoming events, such as speeches by BoJ officials or the release of other key indicators, could quickly shift sentiment.

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

Buy Scenario

Scenario #1: I plan to buy USD/JPY today around the 145.58 entry point (green line on the chart), targeting a rise toward 146.19 (thicker green line on the chart). At 146.19, I plan to exit long positions and open short ones in the opposite direction (expecting a 30–35 pip pullback). It's best to return to buying the pair on corrections and deeper dips in USD/JPY.

Important: Before buying, make sure the MACD indicator is above zero and just beginning to rise.

Scenario #2: I also plan to buy USD/JPY if the price tests 145.20 twice a row while the MACD is in the oversold zone. This would limit the pair's downside potential and could trigger an upward reversal. A rise toward 145.58 and 146.19 may follow.

Sell Scenario

Scenario #1: I plan to sell USD/JPY today only after the price breaks below 145.20 (red line on the chart), which could lead to a sharp drop. The main target for sellers will be 144.58, where I plan to exit the sell trade and immediately open a long position in the opposite direction (expecting a 20–25 pip rebound). Downward pressure on the pair could quickly return today.

Important: Before selling, ensure the MACD indicator is below zero and beginning to decline.

Scenario #2: I also plan to sell USD/JPY if the price tests 145.58 twice consecutively while the MACD is in the overbought zone. This would limit the pair's upside potential and trigger a downward reversal. A decline toward 145.20 and 144.58 may follow.

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.