Trade Analysis and Tips for Trading the Japanese Yen

The test of the 158.89 price coincided with the MACD indicator moving significantly below the zero mark, which limited the pair's downward potential. For this reason, I did not sell the dollar.

Today, the U.S. dollar has risen sharply, while the Japanese yen has declined. Sharp fluctuations in the currency market were provoked by news of U.S. airstrikes against Iranian vessels in the Strait of Hormuz, which seriously jeopardized the fragile peace agreement. Investors, concerned about escalating tensions in the Middle East, rushed to move their assets into safer instruments. The U.S. dollar, traditionally seen as a safe haven during periods of geopolitical instability, therefore strengthened its position, including against the Japanese yen. This is because Japan, as a major importer of energy resources, will continue to feel the negative effects of rising oil prices if the war between the U.S. and Iran continues, which is detrimental to the national economy and currency.

For the intraday strategy, I will primarily rely on implementing Scenarios #1 and #2.

Buy Scenarios

• Scenario #1: I plan to buy USD/JPY today upon reaching an entry point around 159.15 (the green line on the chart), targeting a move to 159.52 (the thicker green line on the chart). At 159.52, I plan to exit the long positions and open short positions immediately on the bounce, anticipating a 30-35-pip move in the opposite direction from the level. It is 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 just beginning to rise from it.
• Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the price at 158.99 when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. We can expect growth to the opposing levels of 159.15 and 159.52.

Sell Scenarios

• Scenario #1: I plan to sell USD/JPY today only after the 158.99 level is broken (the red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the level of 158.64, where I plan to exit the shorts and buy immediately in the opposite direction, anticipating a movement of 20-25 pips in the opposite direction from the level. Sellers may return at any moment with just a hint from the central bank. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning to decline from it.
• Scenario #2: I also plan to sell USD/JPY today if the price tests 159.15 twice in a row while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. We can anticipate a decline to the opposing levels of 158.99 and 158.64.

What the Chart Indicates:

• Thin Green Line: Entry price for buying the trading instrument;
• Thick Green Line: Estimated price where take profit can be set or profits can be locked in, 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 profits can be locked in, as further decline below this level is unlikely;
• MACD Indicator: When entering the market, it's important to consider the overbought and oversold zones.

Important Note:

Novice Forex traders must be very cautious when making market entry decisions. It is best to stay out of the market before important fundamental reports are released to avoid sharp 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 use money management and trade large volumes.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.