Review of Trades and Trading Tips for the Japanese Yen
The test of the 153.52 price level occurred when the MACD indicator was just beginning to move up from the zero line, confirming that the entry point for buying the dollar was correct. As a result, the pair rose by 20 points before pressure on the pair returned.
In the second half of the day, the market is waiting only for ADP's weekly employment change, and I do not have particularly high expectations for this report. Under current conditions, when everything revolves around prices and inflation, even strong hiring data, as recent releases have shown, are unlikely to drive the dollar significantly higher. For the yen, what matters much more is that the United States and Japan continue to actively conduct currency interventions, strengthening the national currency while weakening the dollar across the board. It is this coordinated pressure from the central banks, rather than US economic data, that is currently setting the tone. Combined with traders unwinding carry trades and expectations of a Bank of Japan rate hike on September 18, this keeps the yen among the clear favorites. In my view, even a relatively good ADP report will not change the balance of power under these conditions. I am confident that it will be extremely difficult to reverse USD/JPY higher in the coming days, as dollar buyers are having to push against strong headwinds from direct interventions and the broader weakening of the US currency. As long as the authorities in both countries demonstrate their willingness to act and the market continues to price in policy normalization in Japan, I remain focused on a further decline in the pair, although I also bear in mind that a spike in volatility could bring the upcoming US inflation report back into focus.
As for the intraday strategy, I will focus more on the implementation of Scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy USD/JPY when the entry point reaches around 153.50 (the green line on the chart), with a target of 153.99 (the thicker green line on the chart). Around 153.99, I will exit the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. A rise in the pair today is possible, but the upside potential is rather limited. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.
Scenario #2: Today, I also plan to buy USD/JPY if the price tests 153.16 twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger a reversal higher. A rise toward the opposite levels of 153.50 and 153.99 can be expected.
Sell Signal
Scenario #1: Today, I plan to sell USD/JPY after the 153.16 level is broken (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 152.72, where I will exit the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Pressure on the pair will return today if the central bank intervenes. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.
Scenario #2: Today, I also plan to sell USD/JPY if the price tests 153.50 twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and trigger a reversal lower. A decline toward the opposite levels of 153.16 and 152.72 can be expected.
What the Chart Shows:
- Thin green line — the entry price at which the trading instrument can be bought;
- Thick green line — the expected price level where Take Profit can be placed or profits can be taken manually, as further growth above this level is unlikely;
- Thin red line — the entry price at which the trading instrument can be sold;
- Thick red line — the expected price level where Take Profit can be placed or profits can be taken manually, as further decline below this level is unlikely;
- MACD indicator. When entering the market, it is important to take the overbought and oversold zones into account.
Important. Beginner Forex traders should be extremely cautious when making market-entry decisions. Before important fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp exchange-rate fluctuations. If you decide to trade during news releases, always use stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade with large volumes.
And remember that successful trading requires a clear trading plan, such as the one presented above. Making trading decisions spontaneously based on the current market situation is an inherently losing strategy for an intraday trader.
