Analysis of Trades and Trading Tips for the Japanese Yen
The test of the 149.86 price level occurred when the MACD indicator had moved significantly above the zero mark, limiting the pair's upside potential. For this reason, I did not buy the dollar. The second test of 149.86 happened when the MACD was in the overbought zone, allowing scenario No. 2 for selling to play out, leading to a 30-pip drop in the pair.
Following its meeting, the Bank of Japan expressed growing concern about the potential impact of escalating trade tensions on the global economy while keeping its key interest rate unchanged. The central bank highlighted concerns about U.S. trade policy after President Donald Trump's threats of additional retaliatory tariffs. The governing board, led by Kazuo Ueda, voted to keep the interest rate at 0.5%, aligning fully with economists' expectations, weakening the yen's position.
In a statement released after the meeting, the BOJ noted that uncertainty regarding global economic prospects has increased, mainly due to the escalation of trade disputes. The central bank expressed concerns that these conflicts could negatively impact global trade and investments, which could slow economic growth in Japan. As for future interest rate hikes, everything now depends on how the Japanese economy reacts to the actions of the Trump administration.
For intraday strategy, I will primarily rely on Scenarios #1 and #2.
Buy Signal
Scenario No. 1: I plan to buy USD/JPY today upon reaching the entry point around 149.95 (green line on the chart) with a target of rising to 150.82 (thicker green line). Around 150.82, I plan to exit long and open short positions in the opposite direction, expecting a 30–35 pips downward movement. It is best to return to buying the pair during corrections and significant pullbacks in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and beginning to rise.
Scenario No. 2: I also plan to buy USD/JPY today in case of two consecutive tests of the 149.59 price level when the MACD indicator is in the oversold zone. This will limit the pair's downside potential and lead to an upward market reversal. Growth toward the opposite levels of 149.95 and 150.82 can be expected.
Sell Signal
Scenario No. 1: I plan to sell USD/JPY today only after the price breaks below 149.59 (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be 148.70, where I plan to exit short positions and immediately open long positions in the opposite direction, expecting a movement of 20–25 pips back up. Pressure on the pair could return at any moment. Important! Before selling, ensure that the MACD indicator is below the zero mark and beginning to decline.
Scenario No. 2: I also plan to sell USD/JPY today in case of two consecutive tests of the 149.95 price level when the MACD indicator is in the overbought zone. This will limit the pair's upside potential and lead to a market reversal downward. A decline toward the opposite levels of 149.59 and 148.70 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.
