Analysis of Trades and Trading Tips for the Japanese Yen

The test of the 147.22 price occurred when the MACD indicator began to move downward from the zero mark, confirming an optimal entry point to sell the dollar in alignment with the trend. However, after the pair dropped by 25 pips, selling pressure eased.

Today's data revealed a sharp decline in the BSI (Business Conditions Index) for large manufacturers, putting additional pressure on the Japanese yen. Investors are increasingly concerned about the future of the Japanese economy, especially amidst global uncertainty and the risks of a trade war with the U.S. The drop in the BSI index may indicate a slowdown in manufacturing activity and declining company profitability. This, in turn, could lead to reduced investments and weaker consumer demand. Furthermore, it is important to note that Japan's key economic driver, exports, faces challenges due to weakened global demand.

The Bank of Japan is unlikely to respond to this situation and is expected to maintain its commitment to raising interest rates further, which will support the yen's strengthening in the medium term. Therefore, as the USD/JPY pair rises, it may become increasingly attractive for selling.

Currency traders largely ignored the figures for the Japanese Corporate Goods Price Index, likely due to their focus on the upcoming BOJ meeting, where discussions about potential adjustments to monetary policy are anticipated.

For intraday strategy, I will primarily rely on Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today if the price reaches 148.36 (green line on the chart), with the target to rise to 148.92 (thicker green line). At 148.92, I plan to exit the buy position and open a sell position in the opposite direction, expecting a 30-35 pip movement in the opposite direction from this level. It is best to return and buy the pair during corrections and significant pullbacks in USD/JPY. Important: Before buying, ensure that the MACD indicator is above the zero mark and just beginning to rise.

Scenario #2: I will also consider buying USD/JPY today if there are two consecutive tests of the 148.01 price level when the MACD is in the oversold zone. This will limit the pair's downside potential and lead to an upward market reversal, with expected growth to the opposite levels of 148.36 and 148.92.

Sell Signal

Scenario #1: I plan to sell USD/JPY today only after the price breaks below 148.01 (red line on the chart), which will likely trigger a rapid decline in the pair. The key target for sellers will be 147.34, where I intend to exit the sell position and immediately open a buy position in the opposite direction, expecting a 20-25 pip bounce from this level. The pressure on the pair can return at any moment. Important: Before selling, ensure that the MACD indicator is below the zero mark and beginning to decline.

Scenario #2: I will also consider selling USD/JPY today if there are two consecutive tests of the 148.36 price level when the MACD is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal, with expected declines to the opposite levels of 148.01 and 147.34.

What's on the Chart:

• The thin green line represents the entry price where the trading instrument can be bought.
• The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
• The thin red line represents the entry price where the trading instrument can be sold.
• The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
• The MACD indicator should be used to assess overbought and oversold zones when entering the market.

Important Notes:

• Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
• Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.