Analysis of Trades and Trading Recommendations for the Japanese Yen

The test of the 150.57 level in the second half of the day coincided with the moment when the MACD indicator began moving upward from the zero line. This confirmed a valid entry point for buying the dollar, resulting in a 40-pip increase. Although the target level of 151.05 was eventually reached, I had already exited the market by then.

Today's data on changes in Japan's money supply aggregate fully matched economists' forecasts, which had no impact on the yen's volatility against the U.S. dollar. The alignment of these monetary aggregate figures with expectations signals stability in Japan's monetary policy. This creates an atmosphere of confidence among investors, as predictability in the economic climate encourages long-term investments. However, despite the stability of monetary indicators, the USD/JPY exchange rate remains a focal point of interest, particularly given the anticipated rate hikes by the Bank of Japan and the expected rate cuts by the Federal Reserve in the U.S.

Japan's economy is showing moderate growth, which could support the yen's long-term strengthening. Nevertheless, short-term fluctuations influenced by divergences in monetary policy may still introduce uncertainty in the currency market. For today's intraday strategy, I will focus primarily on executing Scenario #1 and #2.

Buy Scenarios

Scenario #1:

Today, I plan to buy USD/JPY at an entry point near 151.33 (green line on the chart), targeting a rise to 152.06 (thicker green line on the chart). At 152.06, I plan to exit my buy positions and open sell positions in the opposite direction, aiming for a 30-35 pip movement downward from that level. Considering the upward trend, this approach follows the momentum.

Important! Before buying, ensure the MACD indicator is above the zero line and just beginning its upward movement.

Scenario #2:

I also plan to buy USD/JPY today if the price tests 150.66 twice in succession while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger an upward reversal. A rise to the opposing levels of 151.33 and 152.06 can then be expected.

Sell Scenarios

Scenario #1:

I plan to sell USD/JPY today only after the 150.66 level is breached (red line on the chart), likely leading to a quick decline in the pair. The key target for sellers will be 149.83, where I intend to exit sell positions and immediately open buy positions in the opposite direction, aiming for a 20-25 pip upward movement from that level. Pressure on the pair could return today following a failed attempt to update the daily high.

Important! Before selling, ensure the MACD indicator is below the zero line and just beginning its downward movement.

Scenario #2:

I also plan to sell USD/JPY today if the price tests 151.33 twice in succession while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and trigger a reversal downward. A decline to the opposing levels of 150.66 and 149.83 can then be expected.

Chart Notes

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
• Thin red line: Entry price for selling the trading instrument.
• Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
• MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.

Important Note for Beginner Traders

• Always approach market entry decisions cautiously.
• Avoid trading during major news releases to sidestep volatile price swings.
• If trading during news releases, always set stop-loss orders to minimize losses.
• Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.