Trade Analysis and Tips for Trading the Japanese Yen

The test of the 156.67 price occurred when the MACD indicator had already moved significantly downward from the zero mark, which limited the pair's downward potential. For this reason, I did not sell the dollar and missed a good downward move.

In the second half of the day, close attention will be directed toward the release of U.S. economic data for September, including industrial price dynamics, changes in retail trade, and the business activity index calculated by the Richmond Fed. Retail sales data will provide insight into the level of consumer demand. A decline in retail sales may signal a slowdown in economic expansion and a potential deterioration in companies' financial health, which would put pressure on the dollar and the USD/JPY pair. The Richmond Fed Manufacturing Index and the Producer Price Index for September will serve as additional indicators of the industrial sector's condition. An increase in the index will indicate a pickup in manufacturing activity, while a decrease will suggest contraction. Taken together, the published economic data can have a significant impact on the U.S. dollar exchange rate.

As for the intraday strategy, I will rely more on Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy USD/JPY today upon reaching the entry point around 156.52 (green line on the chart) with a target of rising to 157.06 (thicker green line on the chart). Near 157.06, I will exit buy positions and open sell positions in the opposite direction (expecting a 30–35-point reversal from that level). You can count on further pair growth as part of the ongoing bullish market. Important! Before buying, make sure the MACD indicator is above the zero mark and is just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in case of two consecutive tests of the 156.20 price at a time when the MACD indicator is in oversold territory. This will limit the pair's downward potential and lead to a reversal upward. Growth to the opposite levels of 156.52 and 157.06 may be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY today after the 156.20 level is broken (red line on the chart), which will lead to a quick decline in the pair. The key target for sellers will be the 155.65 level, where I will exit sell positions and immediately open buy positions in the opposite direction (expecting a 20–25-point rebound from that level). Pressure on the pair will return if the data are very weak. Important! Before selling, make sure the MACD indicator is below the zero mark and is just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today in case of two consecutive tests of the 156.52 price at a time when the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a reversal downward. A decline to the opposite levels of 156.20 and 155.65 may be expected.

Chart Legend:

• Thin green line – entry price for buying the trading instrument
• Thick green line – approximate price for placing Take Profit or manually locking in profit, since further growth above this level is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – approximate price for placing Take Profit or manually locking in profit, since further decline below this level is unlikely
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones

Important

Beginner Forex traders must be very cautious when making entry decisions. Before important fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you choose to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that successful trading requires a clear trading plan, like the one I presented above. Spontaneous trading decisions based solely on the current market situation are an inherently losing strategy for an intraday trader.