Trade Analysis and Tips for the Japanese Yen

The test of the 152.98 level in the first half of the day occurred when the MACD indicator had moved significantly below the zero mark, limiting the pair's downward potential. For this reason, I did not sell the dollar.

A lot of U.S. economic data is ahead, which could influence market direction and potentially revive demand for the dollar. However, this requires strong data on job growth (ADP report), trade balance surplus, and improvement in the U.S. ISM Services PMI.

Additionally, a more hawkish stance from Federal Reserve officials is needed to support the dollar, but I expect challenges here. If FOMC members Austan D. Goolsbee and Michelle Bowman repeat the dovish stance of Kansas City Fed President Mary Daly, then don't be surprised if USD/JPY continues its decline. A softer Fed policy outlook has recently weakened the U.S. dollar, and if Goolsbee and Bowman reinforce this view, it could further cement expectations of Fed rate cuts.

Meanwhile, the Bank of Japan's anticipated policy tightening remains a key bearish factor for the pair. If the Japanese economy continues to show signs of recovery, this will further strengthen the yen. Investors may seek safer assets, increasing demand for the Japanese yen.

For intraday strategy, I will focus on Scenario #1 and Scenario #2 to continue trading within the downtrend.

Buy Signal

Scenario #1: Buy USD/JPY at 152.96 (green line on the chart) with a target of 153.67. Exit the trade and open sell positions in the opposite direction (expecting a 30-35 point retracement). Only buy after strong U.S. data.

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

Scenario #2: Buy USD/JPY after two consecutive tests of 152.47, if MACD is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upward.Targets: 152.96 and 153.67.

Sell Signal

Scenario #1: Sell USD/JPY after breaking below 152.47 (red line on the chart) with a target of 151.77. Exit the trade and open buy positions in the opposite direction (expecting a 20-25 point retracement). Selling pressure may return only after weak U.S. data.

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

Scenario #2: Sell USD/JPY after two consecutive tests of 152.96, if MACD is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. Targets: 152.47 and 151.77.

Chart Key:

• Thin green line – Entry price for buying the instrument.
• Thick green line – Projected take-profit level (further growth unlikely beyond this point).
• Thin red line – Entry price for selling the instrument.
• Thick red line – Projected take-profit level (further decline unlikely beyond this point).
• MACD Indicator – Monitor overbought/oversold conditions before entering trades.

Important Notes for Beginner Forex Traders:

Be cautious when entering the market, especially before major economic reports. It is best to stay out of the market before high-impact fundamental data to avoid sudden price swings. If trading during news releases, always set stop-loss orders to minimize losses. Without stop-loss orders, you can quickly lose your entire deposit, especially if trading with high leverage.

Successful trading requires a clear strategy, like the one outlined above. Avoid spontaneous trading decisions, as trading based on short-term market fluctuations is a losing strategy for intraday traders.