Trade Review and Tips for the Japanese Yen

The test of the 148.99 level occurred when the MACD indicator had just started to rise from the zero line, confirming a proper entry point for buying the dollar and resulting in a gain of over 60 points for the pair.

Further upward movement of the dollar against the yen will likely depend on strong U.S. data—specifically, a decline in initial jobless claims and an increase in personal income and spending. Only clear evidence of a drop in unemployment claims alongside solid growth in household income and expenditures can provide meaningful support to the dollar against the yen. These indicators serve as a litmus test for the U.S. economy's resilience, particularly following yesterday's GDP growth data. Special attention will be paid to the core Personal Consumption Expenditures (PCE) index, a key inflation gauge closely monitored by the Federal Reserve. A decrease in the PCE index would point to easing inflation and could prompt the Fed to adopt a more cautious stance on interest rates, thereby weakening the dollar. Conversely, persistently high PCE readings could compel the Fed to maintain rates at 4.5% for an extended period.

As for the intraday strategy, I will focus primarily on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today if the price reaches the entry point near 150.28 (green line on the chart), targeting a rise to 150.71 (thicker green line). Around 150.71, I will exit long positions and open short positions in the opposite direction, aiming for a 30–35 point pullback. A strong rally in the pair is likely to continue under the prevailing uptrend. Important! Before buying, make sure the MACD indicator is above the zero line and just beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY today if the price tests the 149.68 level twice in a row while the MACD is in oversold territory. This would limit the pair's downward potential and may lead to a reversal to the upside. A rise to 150.28 and 150.71 may then follow.

Sell Signal

Scenario #1: I plan to sell USD/JPY today after a breakout below 149.68 (red line on the chart), which could lead to a rapid decline. The key target for sellers will be 148.92, where I plan to exit shorts and immediately open long positions in the opposite direction (aiming for a 20–25 point rebound). Selling pressure may return if the Fed signals a more dovish stance. Important! Before selling, ensure that the MACD is below the zero line and just starting to decline.

Scenario #2: I also plan to sell USD/JPY today if the price tests the 150.28 level twice in a row while the MACD is in overbought territory. This would cap the pair's upward potential and could lead to a downward reversal. A decline toward 149.68 and 148.92 may then follow.

Chart Legend:

• Thin green line – entry price for buying the trading instrument
• Thick green line – estimated level for Take Profit or manual exit, as further growth is unlikely beyond this point
• Thin red line – entry price for selling the trading instrument
• Thick red line – estimated level for Take Profit or manual exit, as further decline is unlikely beyond this point
• MACD Indicator – when entering the market, pay close attention to overbought and oversold zones

Important: Beginner Forex traders must exercise great caution when deciding to enter the market. It is best to stay out of the market ahead of major economic reports to avoid being caught in sharp price swings. If you choose to trade during news releases, always set stop-loss orders to minimize potential losses. Without stop-losses, you could quickly lose your entire deposit, especially if you do not apply proper money management and trade large volumes.

Remember, successful trading requires a clear trading plan—like the one provided above. Making impulsive decisions based on current market conditions is an inherently losing strategy for intraday traders.