Trade Review and Advice on Trading the Japanese Yen

A test of 149.78 occurred when the MACD indicator had just started moving upward from the zero mark, which seemed like a good opportunity to buy the dollar. However, as seen on the chart, the trade resulted in a loss. I did not sell at 149.44 because, at the time of the test, MACD had already moved significantly below the zero mark, limiting the pair's downward potential.

Today, public speeches and comments from FOMC members Michael Barr and Thomas Barkin are expected. Their statements will likely reflect their stance on the future of monetary policy. A cautious tone from them could trigger increased yen purchases and dollar selling. Market participants will focus on Barr and Barkin's remarks to assess the likelihood of further interest rate cuts. However, ongoing inflation concerns may support a hawkish stance, keeping monetary policy restrictive and bolstering the US dollar. A dovish tone, hinting at possible rate cuts, could strengthen the yen, as the Bank of Japan follows an entirely different approach.

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

Buy Signal

Scenario #1: I plan to buy USD/JPY at 150.01 (green line on the chart) with a target of 150.48. At 150.48, I will exit the trade and consider selling the pair for a 30-35 point pullback. The expected increase in the pair would be part of a corrective upward movement.Important! Before buying, ensure the MACD indicator is above the zero mark and just starting to rise.

Scenario #2: Another buying opportunity arises if the price tests 149.59 twice, while the MACD indicator is in oversold territory. This setup would limit downward potential and trigger a rebound, with targets at 150.01 and 150.48.

Sell Signal

Scenario #1: I plan to sell USD/JPY after breaking below 149.59 (red line on the chart), which could lead to a sharp decline in the pair. The key target for sellers is 149.11, where I will exit the trade and immediately buy for a 20-25 point rebound. Selling pressure could return at any moment.Important! Before selling, ensure the MACD indicator is below the zero mark and just starting to decline.

Scenario #2: I will also consider selling USD/JPY if the price tests 150.01 twice, while the MACD indicator is in overbought territory. This setup would limit upward potential and lead to a reversal downward, with expected targets at 149.59 and 149.11.

Chart Explanation

• Thin green line – Entry price for buying the trading instrument.
• Thick green line – Take Profit level, where further price growth is unlikely.
• Thin red line – Entry price for selling the trading instrument.
• Thick red line – Take Profit level, where further price decline is unlikely.
• MACD Indicator – When entering the market, it is crucial to consider overbought and oversold conditions.

Important Notes for Beginner Forex Traders

Caution is essential when making trading decisions. Before major economic reports, it is often best to stay out of the market to avoid sudden price swings. If you choose to trade during news events, always use stop-loss orders to minimize risks. Trading without proper risk management can quickly deplete your entire account, especially when using high leverage.

For consistent success, a clear trading plan is crucial—similar to the one outlined above. Making spontaneous trading decisions based on market fluctuations is a losing strategy for intraday traders.