Analysis of Trades and Trading Tips for the Japanese Yen

The test of the 146.84 price level occurred when the MACD indicator had just begun moving upward from the zero mark, confirming the correct entry point for buying the dollar and resulting in a rise of more than 60 points in the pair.

The Japanese yen lost all its earlier gains, while the U.S. dollar rose yesterday after U.S. producer prices in July jumped by 0.9%, exceeding economists' forecasts. This movement reflected growing expectations of a more aggressive monetary policy by the Federal Reserve. Investors, concerned about persistent inflation, saw this data as confirmation of the need to maintain interest rates at current levels for longer. The Japanese yen, on the other hand, came under pressure. The Bank of Japan continues to maintain a wait-and-see stance regarding further rate hikes, making the yen less attractive to investors. The interest rate gap between the U.S. and Japan continues to widen, putting additional pressure on the yen.

Today's strong GDP growth data for Japan — up 0.3% in the second quarter — supported the yen. Investors interpreted these figures as a signal of a possible shift toward a tighter policy by the BOJ, boosting the yen's appeal. In the near term, USD/JPY dynamics will be determined by the balance between expectations regarding the monetary policies of the BOJ and the Fed, as well as global economic and geopolitical factors.

For intraday strategy, I will focus primarily on Scenarios #1 and #2.

Buy Scenario

Scenario #1: Today, I plan to buy USD/JPY upon reaching the entry point around 147.26 (green line on the chart) with the target of rising to 147.66 (thicker green line on the chart). Around 147.66, I plan to exit purchases and open sales in the opposite direction (expecting a 30–35 point move in the opposite direction from this level). It is best to return to buying the pair during corrections and significant pullbacks in USD/JPY. Important: Before buying, ensure the MACD indicator is above the zero mark and is just starting to rise from it.

Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the 147.05 price level when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward reversal. Growth can be expected toward the opposite levels of 147.26 and 147.66.

Sell Scenario

Scenario #1: Today, I plan to sell USD/JPY only after the 147.05 level (red line on the chart) is updated, which will lead to a quick drop in the pair. The key target for sellers will be 146.68, where I plan to exit sales and immediately open purchases in the opposite direction (expecting a 20–25 point move in the opposite direction from this level). It is best to sell as high as possible. Important: Before selling, ensure the MACD indicator is below the zero mark and is just starting to decline from it.

Scenario #2: I also plan to sell USD/JPY today in the event of two consecutive tests of the 147.26 price level when the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a reversal downward. A decline can be expected toward the opposite levels of 147.05 and 146.68.

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.