Trade Review and Trading Tips for the Japanese Yen

The test of the 156.40 price level occurred at a moment when the MACD indicator had already moved significantly upward from the zero line, which, in my view, limited the dollar's upward potential. For this reason, I did not buy and missed the upward move.

Next, the U.S. labor market will set the direction. The ADP report provides valuable information on employment dynamics in the private sector. A substantial increase in the number of new jobs, exceeding forecasts, could lead to a strengthening of the dollar and a weakening of the Japanese yen. Conversely, weak data could support the yen, which is once again heavily oversold against the U.S. currency. Equally important is the ISM services PMI, which reflects the condition of a significant part of the U.S. economy. A reading above 50 points indicates expansion in the sector, while a reading below indicates contraction. Market participants will analyze both the headline index and its components, including new orders and employment, to assess the sector's outlook. The composite PMI, which combines data from the manufacturing and services sectors, will form an overall picture of business activity in the economy. It may also influence trader sentiment, especially in the case of significant deviations from forecast values. Today's speeches by Federal Reserve officials may also add volatility, but I would not expect strong yen strengthening following their statements.

As for the intraday strategy, I will rely more on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy USD/JPY upon reaching the entry point around 156.84 (green line on the chart), with a growth target at 157.27 (the thicker green line on the chart). Around 157.27, I will exit long positions and open sell positions in the opposite direction (aiming for a move of 30–35 points in the opposite direction from this level). Growth in the pair today can be expected after strong U.S. data.Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in the event of two consecutive tests of the 156.39 price level while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal of the market upward. Growth toward the opposite levels of 156.84 and 157.27 can be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY today after an update of the 156.39 level (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 155.86 level, where I will exit sell positions and immediately open buy positions in the opposite direction (aiming for a move of 20–25 points in the opposite direction from this level). Pressure on the pair will return in the case of weak data.Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today in the event of two consecutive tests of the 156.84 price level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal of the market downward. A decline toward the opposite levels of 156.39 and 155.86 can be expected.

What's on the Chart

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated price where Take Profit orders can be placed or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated price where Take Profit orders 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 rely on overbought and oversold zones.

Important. Beginner traders in the Forex market need to be very cautious when making decisions about entering the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.