Analysis of Trades and Trading Recommendations for the Japanese Yen

The test of the 150.05 price level in the second half of the day occurred when the MACD indicator had just started moving downward from the zero mark, confirming the correct entry point for selling the dollar. As a result, the pair dropped by more than 80 pips.

Today's data on the reduction of Japan's monetary base exerted slight pressure on the yen, but overall, the trend remains bullish. The decrease in the money supply is linked to the Bank of Japan's increasingly firm stance toward normalizing monetary policy after years of economic stimulus. This decision may signal more optimistic forecasts for the country's economic growth, which bolsters investor confidence in the long term.

The yen is expected to strengthen amid stable growth in Japan's economy and improved external trade indicators. Investors consider the yen a safe haven in the face of global economic instability, further supporting the currency. However, it should be noted that more than statements from Japanese policymakers will be needed for the USD/JPY pair to decline further. Concrete actions aimed at tightening monetary policy are necessary; without them, demand for the yen may not hold for long.

Given the lack of signs suggesting a reversal of the USD/JPY downtrend, it is advisable to bet on its continued decline. For intraday strategies, I plan to focus on implementing Scenario #1 and Scenario #2.

Buy Scenarios

Scenario #1:

I plan to buy USD/JPY today at an entry point near 150.34 (green line on the chart), targeting growth to 151.18 (thicker green line on the chart). At 151.18, I plan to exit buy positions and open sell positions in the opposite direction, aiming for a 30–35-pip downward movement from the level. Considering the downtrend, exercise caution when buying.

Important! Before buying, ensure the MACD indicator is above the zero mark and starting to rise.

Scenario #2:

I also plan to buy USD/JPY today if the price level of 149.80 is tested twice consecutively, provided the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger an upward reversal. Growth can be expected to the opposing levels of 150.34 and 151.18.

Sell Scenarios

Scenario #1:

I plan to sell USD/JPY today after breaking below the 149.80 level (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be 149.09, where I plan to exit sell positions and immediately open buy positions in the opposite direction, aiming for a 20–25 pip upward movement from the level. Downward pressure on the pair may persist during the first half of the day.

Important! Before selling, ensure the MACD indicator is below the zero mark and starting to decline.

Scenario #2:

I also plan to sell USD/JPY today if the price level of 150.34 is tested twice consecutively, provided the MACD indicator is in the overbought zone. This will limit the pair's upward potential and trigger a reversal downward. A decline can be expected to the opposing levels of 149.80 and 149.09.

What's on the Chart:

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
• Thin red line: Entry price for selling the trading instrument.
• Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
• MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.

Important Notes for Beginner Forex Traders:

• Always approach market entry decisions cautiously.
• Avoid trading during major news releases to sidestep volatile price swings.
• If trading during news releases, always set stop-loss orders to minimize losses.
• Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.
• A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous for intraday traders.