Analysis of Trades and Advice for Trading the Japanese Yen

The 151.19 price test in the second half of the day occurred as the MACD indicator began moving downward from the zero line. This confirmed a valid sell entry for the dollar, resulting in a drop toward the target level of 150.57. Buying on the rebound from this level yielded approximately 40 points in profit.

Signals of a potential interest rate hike by the Bank of Japan continue to support the Japanese yen. This has strengthened the currency against the US dollar. Investors are reacting to indications from the Bank of Japan about its readiness to adjust monetary policy, creating conditions for a stronger yen. This trend reflects growing confidence in the Japanese economy and its ability to address inflationary risks that have hindered stable growth for years. The gradual tightening of monetary policy is a response to prolonged stagnation caused by low rates and excessive money supply expansion.

However, a strengthening yen could impact Japanese export companies, as a higher national currency value makes Japanese goods less competitive internationally. The central bank closely monitors the yen's exchange rate and economic dynamics, particularly to mitigate the negative effects of a strong yen on export competitiveness.

Given the lack of signs indicating a reversal of the downtrend in USD/JPY, it's more prudent to anticipate further decline. For intraday strategies, I will focus primarily on implementing Scenario 1 and Scenario 2.

Buying Scenarios

1. Scenario 1:I recommend buying USD/JPY at the 151.74 entry point (green line on the chart), targeting 152.41 (thicker green line on the chart). Around 152.41, consider exiting purchases and opening sell positions, expecting a reversal of 30-35 points. Given the ongoing downtrend, proceed cautiously with buying.Important! Before buying, ensure the MACD indicator is above the zero line and just beginning to rise.
2. Scenario 2:Consider buying USD/JPY after two consecutive tests of 151.32, provided the MACD indicator is in the oversold zone. This setup will limit the pair's downward potential and likely trigger an upward market reversal. Expect a rise toward the resistance levels of 151.74 and 152.41.

Selling Scenarios

1. Scenario 1:I recommend selling USD/JPY after a breach of the 151.32 level (red line on the chart), which is likely to lead to a rapid decline. The key target for sellers is 150.57. At this level, consider exiting sales and opening buy positions, anticipating a reversal of 20-25 points. Downward pressure on the pair may persist in the first half of the day.Important! Before selling, ensure the MACD indicator is below the zero line and just starting to decline.

Scenario 2:Consider selling USD/JPY after two consecutive tests of 151.74, provided the MACD indicator is in the overbought zone. This setup will limit the pair's upward potential and likely trigger a downward market reversal. Expect a decline toward the support levels of 151.32 and 150.57.

Chart Legend

• Thin green line: Entry price for buying the instrument.
• Thick green line: Suggested price for Take Profit or manual profit-taking, as further growth beyond this level is unlikely.
• Thin red line: Entry price for selling the instrument.
• Thick red line: Suggested price for Take Profit or manual profit-taking, as further declines beyond this level are unlikely.
• MACD Indicator: Use overbought and oversold zones to guide entry decisions.

Important Notes for Beginner Forex Traders

1. Caution Before Major Reports: Avoid market entry before critical fundamental reports to minimize exposure to sudden price swings.
2. Always Use Stop-Loss Orders: Trading without stop-losses can quickly deplete your account, especially if trading large volumes or neglecting money management principles.
3. Follow a Clear Trading Plan: A structured plan, such as the one presented here, is essential for success.
4. Avoid Spontaneous Decisions: Reacting impulsively to market movements often leads to losses, particularly for intraday traders.

By maintaining discipline and following these guidelines, you can improve your trading success in the Forex market.