Analysis of Trades and Trading Tips for the Japanese Yen

The 148.72 price test occurred when the MACD indicator had already moved significantly above the zero level, limiting the pair's upward potential. For this reason, I did not buy the dollar. The second test of 148.72 happened when MACD was already in the overbought zone, allowing Scenario #2 for selling to play out, but a major downward move did not follow.

The University of Michigan Consumer Sentiment Index and inflation expectations report are the only key events in the second half of the day, so a strong rally in USD/JPY as part of a continued correction should not be expected. While these data points are important for understanding the current U.S. economic climate, their impact on the currency market is likely to be short-lived.

Since USD/JPY has already seen significant gains, expecting further substantial growth based solely on these reports is unrealistic. Many key factors affecting the exchange rate have already been priced in, and for a more significant upward move, a stronger catalyst would be needed beyond routine economic reports. By the end of the week, we are likely to see either consolidation near current levels or a slight downward correction, as investors take profits after the morning rally.

For intraday trading, I will focus on Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: Buying USD/JPY is possible if the price reaches 148.93 (green line on the chart), with a target of 149.40 (thicker green line). At 149.40, I plan to exit long positions and open short positions, aiming for a 30-35 point retracement. The uptrend supports further growth.

Important! Before buying, ensure that the MACD indicator is above the zero level and just starting to rise.

Scenario #2: Another buying opportunity will arise if the price tests 148.63 twice, while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger a reversal to the upside. Potential targets: 148.93 and 149.40.

Sell Signal

Scenario #1: Selling USD/JPY is an option after the price breaks below 148.63 (red line on the chart), which could lead to a quick decline in the pair. The main target for sellers will be 148.20, where I plan to exit short positions and buy in the opposite direction, aiming for a 20-25 point retracement. Selling pressure on the pair could return at any moment.

Important! Before selling, ensure that the MACD indicator is below the zero level and just starting to decline.

Scenario #2: Another selling opportunity will arise if the price tests 148.93 twice, while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and trigger a reversal to the downside. Potential targets: 148.63 and 148.20.

Chart Breakdown

• Thin green line – Entry price for buy positions
• Thick green line – Expected price level for Take Profit or manual profit-taking, as further growth beyond this point is unlikely
• Thin red line – Entry price for sell positions
• Thick red line – Expected price level for Take Profit or manual profit-taking, as further decline beyond this point is unlikely
• MACD Indicator: It is crucial to follow overbought and oversold zones when entering the market

Important Notes for Beginner Traders

Beginner Forex traders should exercise caution when entering the market. Before the release of key economic reports, it is best to stay out of the market to avoid being caught in sharp price swings.

If you decide to trade during news releases, always use stop-loss orders to minimize potential losses. Without stop-loss protection, you can quickly deplete your account balance, especially if you trade large volumes without proper risk management.

Remember: Successful trading requires a clear trading plan, similar to the one outlined above. Making impulsive trading decisions based on current market movements is a losing strategy for intraday traders.