Analysis of Trades and Trading Tips for the Japanese Yen
The price test at 153.63 coincided with the moment when the MACD indicator began to move downward from the zero mark, confirming an ideal entry point for selling the dollar. As a result, the pair dropped toward the target level of 153.03. Buying on a rebound from that level generated a profit of approximately 20 pips, after which selling pressure on the pair returned.
Despite U.S. President Donald Trump instructing his administration to consider imposing retaliatory tariffs on various trading partners—an action that raises the likelihood of a broader trade war—the dollar weakened against the yen throughout the day. Japanese authorities have reached out to the Trump administration for clarification on trade restrictions, indicating Japan's willingness to engage in dialogue. This may have helped the yen maintain its strength against the dollar.
Japan is likely to advocate for a review of trade conditions that they believe disadvantage Japanese manufacturers. The primary focus is on the automotive industry, where export tariffs could significantly affect the competitiveness of Japanese companies in the U.S. market. Meanwhile, the Bank of Japan continues its monetary tightening policy, which supports demand for the yen.
Thus, the situation regarding the yen remains complex and multifaceted. On one hand, there is pressure from the U.S. on trade issues; on the other, there is support from Japan's tight monetary policy and readiness for negotiations. The future movement of the USD/JPY pair will depend on how effectively Japan defends its economic interests in talks with American counterparts.
Regarding the intraday strategy, I will primarily rely on Scenarios #1 and #2.
Buy Signal
Scenario #1: I plan to buy USD/JPY at 152.81 (green line on the chart) with a target of 153.41 (thicker green line). Around 153.41, I plan to exit long positions and initiate short positions in anticipation of a 30-35 pip retracement. It is preferable to return to buying the pair during corrections and significant pullbacks in USD/JPY. Important! Before entering a buy trade, ensure that the MACD indicator is above the zero mark and starting to rise.
Scenario #2: Buying USD/JPY is also an option if the price tests 152.46 twice while the MACD indicator is in the oversold zone. This setup would limit the pair's downside potential and trigger a market reversal to the upside. A rise toward the opposite levels, 152.81 and 153.41, is expected.
Sell Signal
Scenario #1: Selling USD/JPY is planned after breaking below 152.46 (red line on the chart), which could lead to a rapid decline in the pair. The key target for sellers will be 151.81, where I intend to exit short positions and immediately enter long positions (expecting a 20-25 pip retracement from the level). Selling pressure on the pair could return at any moment in the first half of the day. Important! Before selling, ensure that the MACD indicator is below the zero mark and beginning to decline.
Scenario #2: Selling USD/JPY is also an option if the price tests 152.81 twice while the MACD indicator is in the overbought zone. This setup would limit the pair's upside potential and trigger a market reversal to the downside. A decline toward 152.46 and 151.81 can 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.
- A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous for intraday traders.
