Review of Trades and Trading Tips for the Japanese Yen

The price test at 158.71 coincided with the moment when the MACD indicator was just beginning to move upward from the zero mark, confirming the correct entry point for buying the dollar. As a result, the pair rose to the target level of 159.02.

The dollar increased on Friday following a strong business activity report, with the composite PMI rising to 56.0, the highest in 52 months, while the services sector reached its highest level in 20 months. According to S&P Global, this indicates an acceleration in GDP growth to about 3.0% annually in the third quarter, heightening expectations for a hawkish Federal Reserve stance and boosting U.S. Treasury yields, providing support for the dollar. For the yen, the strengthening dollar put pressure, as it widened the gap between the Fed and the much more cautious Bank of Japan; this difference has traditionally weakened the Japanese currency. Against the backdrop of a strong PMI, the USD/JPY pair had reason to rise, although contradictions within the report tempered its momentum.

Regarding the intraday strategy, I will primarily rely on the implementation of scenarios No. 1 and No. 2.

Buying Scenarios

Scenario No. 1: Today, I plan to buy USD/JPY at an entry point around 159.05 (green line on the chart), with a target for growth to 159.51 (thicker green line on the chart). At 159.51, I plan to exit long positions and sell immediately in the opposite direction, expecting a move of 30-35 pips from the entry point. It is best to return to buying the pair during corrections and significant pullbacks of USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in the event of two consecutive tests of 158.82, with the MACD indicator in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. One can expect growth toward the opposite levels of 159.05 and 159.51.

Selling Scenarios

Scenario No. 1: I plan to sell USD/JPY today only after it breaks below 158.82 (red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be 158.48, where I plan to exit short positions and open longs in the opposite direction (expecting a move of 20-25 pips back from that level). Sellers will return at any moment; they need any hint from the central bank. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today if there are two consecutive tests of 159.05 while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a downward market reversal. One can expect a decline toward the opposite levels of 158.82 and 158.48.

What the Chart Shows:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price where take profit can be set, or profit can be realized, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated price where take profit can be set, or profit can be realized, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner forex traders need to make entry decisions very cautiously. Before key fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not practice money management and trade large volumes.

And remember, successful trading requires a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.