Analysis of Trading Setups and Tips for Trading the Japanese Yen

The test of the 159.81 price level in the first half of the day occurred when the MACD indicator had just begun moving upward from the zero line, confirming a valid entry point for buying the dollar. As a result, the pair rose by just 12 points, with no further movement.

The yen remains under pressure from the dollar, and it is important to note that the USD/JPY exchange rate has approached the psychological 160 level. This morning, Mimura, who is responsible for currency policy at Japan's Ministry of Finance, stated that exchange rate movements in recent days had been too rapid and reminded markets that it was still too early to forget the events of last summer. He did not specify any particular levels, but the message was clear: if the exchange rate rises above 160, the risk of intervention will once again become significant.

However, dollar support is clearly expected to persist in the second half of the day. The US weekly jobless claims report is due, with a forecast of 195K following the previous reading of 189K. Existing home sales are also expected, with a forecast of 3.87M compared with 3.99M previously. Several FOMC members will also speak. Their comments have provided substantial support for the dollar this week. The speeches by Hammack and Goolsbee are of particular interest. In the event of hawkish comments from the Federal Reserve, the pair could test 160. Above this level, warnings from the Ministry of Finance could give way to actual intervention.

As for the intraday strategy, greater emphasis will be placed on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Buying USD/JPY is planned today when the price reaches the entry point near 159.81 (the thin green line on the chart), with a target of a rise to 160.23 (the thicker green line on the chart). Near 160.23, long positions will be closed and short positions opened in the opposite direction, targeting a move of 30–35 points in the opposite direction from that level. A rise in the pair today can be expected only if US economic data is strong. Important: Before buying, make sure that the MACD indicator is above the zero line and has only just begun moving upward from it.

Scenario No. 2: Buying USD/JPY is also planned today if the price tests 159.60 twice consecutively while the MACD indicator is in the oversold area. This would limit the pair's downward potential and trigger an upward market reversal. A rise toward the opposite levels of 159.81 and 160.23 can then be expected.

Sell Signal

Scenario No. 1: Selling USD/JPY is planned today after the price breaks below 159.60 (the red line on the chart), which could lead to a rapid decline in the pair. The sellers' key target will be 159.23, where short positions will be closed and long positions opened immediately in the opposite direction, targeting a move of 20–25 points in the opposite direction from that level. Downward pressure on the pair could return today if the central bank intervenes. Important: Before selling, make sure that the MACD indicator is below the zero line and has only just begun moving downward from it.

Scenario No. 2: Selling USD/JPY is also planned today if the price tests 159.81 twice consecutively while the MACD indicator is in the overbought area. This would limit the pair's upward potential and trigger a downward market reversal. A decline toward the opposite levels of 159.60 and 159.23 can then be expected.

What the Chart Shows

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the projected price level at which Take Profit orders can be placed or profits can be closed manually, as further gains above this level are considered unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the projected price level at which Take Profit orders can be placed or profits can be closed manually, as further declines below this level are considered unlikely;
• MACD indicator. When entering the market, it is important to take overbought and oversold conditions into account.

Important. Beginner Forex traders should exercise great caution when making market entry decisions. Before the release of major fundamental reports, it is generally best to stay out of the market to avoid exposure to sharp exchange rate fluctuations. If trading during news releases, always use stop-loss orders to minimize potential losses. Without stop-loss orders, the entire trading account can be depleted very quickly, especially if risk management rules are not followed and large position sizes are used.

Remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on current market conditions is an inherently losing strategy for an intraday trader.