Analysis of Trades and Tips for Trading the Japanese Yen

The price test at 157.92 occurred at a time when the MACD indicator had just begun to move upward from the zero mark, confirming the correct entry point to buy the dollar. As a result, the pair rose toward the target level of 158.22.

A strong report on jobless claims supported the dollar yesterday and added tension to the USD/JPY pair. The figure for the week ending August 1 was 199,000, confirming the resilience of the US labor market. For the yen, this was an unfavorable signal, as a stronger dollar on the back of solid data removes support from the Japanese currency, especially since the gap in policy between the hawkish Federal Reserve and the cautious Bank of Japan remains wide. It's worth noting that the BoJ recently intervened in the market to support the yen amid its sharp weakening, so further increases in USD/JPY could prompt authorities to consider similar measures again. For now, the strong dollar keeps the pair at elevated levels, making it difficult for the Japanese currency to overcome the pressure without a change in sentiment surrounding the US economy.

Regarding intraday strategy, I will mainly rely on implementing Scenarios No. 1 and No. 2.

Buying Scenarios

Scenario No. 1: I plan to buy USD/JPY today when the price reaches around 158.43 (green line on the chart), targeting a rise to 158.69 (thicker green line on the chart). At 158.69, I intend to exit my long positions and open short positions in the opposite direction, expecting a move of 30-35 pips from the entry point. It's 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 beginning its rise from it.

Scenario No. 2: I also plan to buy USD/JPY today if there are two consecutive tests of 158.27, with the MACD indicator in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. One can expect a rise to the corresponding levels of 158.43 and 158.69.

Selling Scenarios

Scenario No. 1: I plan to sell USD/JPY today only after the price reaches 158.27 (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be 157.95, where I intend to exit my shorts and immediately buy in the opposite direction, expecting a move of 20-25 pips from that level. Sellers will return at any moment; it just takes any hint from the central bank. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning its decline from it.

Scenario No. 2: I also plan to sell USD/JPY today if there are two consecutive tests of 158.43 while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a downward market reversal. One can expect a decline to the corresponding levels of 158.27 and 157.95.

What the Chart Shows:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price where take profit can be set, or profit can be realized, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated price where take profit can be set, or profit can be realized, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner forex traders need to make entry decisions very cautiously. Before key fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not practice money management and trade large volumes.

And remember, successful trading requires a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.