Analysis of Trades and Trading Tips for the Japanese Yen
The price test at 143.12 occurred when the MACD indicator had already moved significantly upward from the zero mark, which limited the pair's upward potential. For this reason, I did not buy the dollar and missed the entire upward movement.
Donald Trump's latest manipulations with trade tariffs have limited the yen's upside potential and strengthened the dollar. The unpredictable international trade policy typical of the Trump administration creates an atmosphere of instability in global financial markets. Considering that the U.S. and Japan have yet to conclude a trade agreement, investors seeking to minimize risks are reallocating assets into safer currencies, with the U.S. dollar traditionally being one of the leaders in this regard.
During the Asian session, traders initially responded by buying after positive Japanese data, but the upward momentum did not last long. The services PMI and composite PMI figures for Japan exceeded economists' forecasts, signaling a positive trend for the Japanese economy, which shows restrained growth. The increase in services sector activity suggests that domestic demand is gradually recovering, potentially supporting overall economic growth. The better-than-expected PMI readings could be attributed to factors such as improved consumer sentiment, increased government spending, and a rebound in the tourism sector post-pandemic. However, it's important to note that this is only one indicator, and a more accurate assessment requires considering other macroeconomic data.
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 144.47 (green line on the chart), targeting growth to 145.06 (thicker green line). Around 145.06, I plan to exit purchases and open sales in the opposite direction (expecting a 30–35 pip move backward). It is best to return to buying the pair on corrections and serious drawdowns of USD/JPY.
Important: Before buying, ensure the MACD indicator is above the zero mark and beginning to rise.
Scenario #2: I also plan to buy USD/JPY today in case of two consecutive tests of the 144.01 level when the MACD indicator is in the oversold zone. This would limit the pair's downside potential and trigger an upward market reversal. Growth toward 144.47 and 145.06 can be expected.
Sell Scenario
Scenario #1: I plan to sell USD/JPY today only after the 144.01 level (red line on the chart) is updated, leading to a rapid decline in the pair. The key target for sellers will be 143.39, where I plan to exit sales and immediately open purchases in the opposite direction (expecting a 20–25 pip move backward). Pressure on the pair may quickly return today.
Important: Before selling, ensure the MACD indicator is below the zero mark and just beginning to decline.
Scenario #2: I also plan to sell USD/JPY today in case of two consecutive tests of the 144.47 level when the MACD indicator is in the overbought zone. This would limit the pair's upward potential and trigger a market reversal downward. A decline toward 144.01 and 143.39 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.
