Trade Analysis and Advice for Trading the Japanese Yen

The price test at 155.40 occurred when the MACD indicator had moved far above the zero line, which limited the pair's upward potential. The second test of 155.40 triggered Scenario #2 for selling the dollar, but a major drop in the pair did not occur.

During the U.S. session, attention will focus on speeches by two members of the Federal Open Market Committee—John Williams and Raphael Bostic. If their statements lean toward dovish monetary policy, pressure on the U.S. dollar is expected to resume. Conversely, if the Fed's rhetoric is tighter following yesterday's labor market data, the dollar may gain momentum, potentially triggering another wave of USD/JPY strength. However, when buying the dollar and selling the yen, keep in mind that the Bank of Japan will raise interest rates the following day, which could instantly shift market sentiment.

For intraday strategy, I will mainly rely on Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today around the entry point of 155.61 (green line on the chart) with a target of 156.09 (thicker green line on the chart). Around 156.09, I will exit purchases and open sales in the opposite direction (expecting a 30–35 point move from the level). Growth in the pair can only be expected after a hawkish Fed stance. Important: Before buying, ensure the MACD is above zero and just beginning to rise.

Scenario #2: I also plan to buy USD/JPY if the price tests 155.40 twice consecutively while the MACD is in the oversold zone. This limits downward potential and should trigger a market reversal upward. Expected targets are 155.61 and 156.09.

Sell Signal

Scenario #1: I plan to sell USD/JPY after the pair breaks 155.40 (red line on the chart), which will trigger a rapid drop. The key target for sellers is 155.14, where I will exit sales and immediately open purchases in the opposite direction (expecting a 20–25 point move from the level). Selling pressure on the pair will only resume if the Fed takes a dovish stance. Important: Before selling, ensure the MACD is below zero and just beginning to decline.

Scenario #2: I also plan to sell USD/JPY if the price tests 155.61 twice consecutively while the MACD is in the overbought zone. This limits upward potential and should trigger a market reversal downward. Expected targets are 155.40 and 155.14.

Chart Explanation

• Thin green line: Entry price for buying the instrument.
• Thick green line: Suggested Take Profit or level to secure profits, as further growth above this point is unlikely.
• Thin red line: Entry price for selling the instrument.
• Thick red line: Suggested Take Profit or level to secure profits, as further decline below this point is unlikely.
• MACD indicator: Use overbought and oversold zones when entering trades.

Important. Beginner Forex traders need to make their entry decisions very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid falling into sharp fluctuations in the exchange rate. If you decide to trade during the news release, always place stop orders to minimize losses. Without placing stop orders, you can lose your entire deposit very quickly, especially if you do not use money management, but trade in large volumes.

And remember that for successful trading it is necessary to have a clear trading plan, following the example of the one I presented above. Spontaneous trading decision-making based on the current market situation is an inherently losing strategy for an intraday trader.