Trade Analysis and Tips for the Japanese Yen

The price test at 159.98 occurred when the MACD indicator had moved significantly below the zero mark, limiting the pair's downward potential. The second test at 159.98 coincided with the MACD being in the oversold area, leading to the execution of Scenario #2 for buying the dollar. As a result, the pair rose by 20 pips.

Despite yesterday's decline in the USD/JPY pair, driven by geopolitical upheavals and further Iranian strikes on U.S. bases, pressure on the yen quickly returned. Asian markets, which reopened after the weekend, reacted to the escalation of tensions in the Middle East, further fueling demand for traditional safe-haven assets. All of this suggests that yesterday's strengthening of the yen was short-lived, reflecting more of a central bank intervention rather than a sustainable trend. Due to the situation in the Middle East, the yen will continue to demonstrate weakness against the dollar.

In the near term, traders are betting on elevated volatility in the USD/JPY pair, as everyone expects intervention from the Bank of Japan in the form of currency interventions.

Regarding the intraday strategy, I will rely more on implementing Scenarios #1 and #2.

Buying Scenarios

Scenario #1: I plan to buy USD/JPY today at the entry point around 160.23 (green line on the chart), with a target of 160.39 (thicker green line on the chart). At around 160.39, I plan to exit the long positions and sell in the opposite direction (anticipating a movement of 30-35 pips from the level). 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 is just starting to rise from there.

Scenario #2: I also plan to buy USD/JPY today in the case of two consecutive tests of the price 160.11 when the MACD is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth can be expected towards the opposite levels of 160.23 and 160.39.

Selling Scenarios

Scenario #1: I plan to sell USD/JPY today only after it breaks the level of 160.11 (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be 159.87, where I plan to exit the short position and immediately buy in the opposite direction (anticipating a move of 20-25 pips in the opposite direction from the level). Sellers will return at any moment; all it takes is a hint from the central bank. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning to decrease from there.

Scenario #2: I also plan to sell USD/JPY today in the case of two consecutive tests of the price 160.23 when the MACD is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. A decrease can be expected towards the opposite levels of 160.11 and 159.87.

What's on the Chart:

Thin green line – entry price for buying the trading instrument;

Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;

Thin red line – entry price for selling the trading instrument;

Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;

MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you are not using money management and are trading large volumes.

And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.