Analysis of trades and tips for trading the Japanese yen

The test of 148.37 occurred when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential. The second test of 148.37 a short time later coincided with MACD being in the overbought area, which allowed scenario #2 for selling the dollar to play out, resulting in a decline of only 17 points.

During the U.S. trading session, USD/JPY faces a test of strength under the influence of several key macroeconomic releases. First and foremost are the ADP employment figures, which traditionally precede the official U.S. Labor Department statistics. This report sets the tone for investor sentiment, allowing an assessment of private-sector job creation and, accordingly, the overall labor market condition. Equally important will be the number of initial jobless claims, reflecting the stability of employment and possible signs of slowing economic growth.

In addition to employment data, attention will be focused on the U.S. trade balance report and the ISM services PMI, an important indicator of the U.S. economy given that the services sector accounts for a significant share of GDP.

The final note will be a speech by FOMC member John Williams. His comments on the current economic situation and the Federal Reserve's monetary policy outlook may significantly influence market expectations regarding the regulator's next steps and, as a result, affect the dollar's dynamics against the yen.

As for the intraday strategy, I will rely mainly on scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today at an entry point around 148.45 (green line on the chart) with a target at 148.90 (thicker green line on the chart). Around 148.90, I will exit buys and open short positions in the opposite direction (expecting a 30–35-point pullback). Growth in the pair will only be possible after strong data. Important! Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.

Scenario #2: I also plan to buy USD/JPY today in the case of two consecutive tests of 148.17, at the moment when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal upward. Growth toward 148.45 and 148.90 can then be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY today after a break below 148.17 (red line on the chart), which would lead to a quick decline. The key target for sellers will be 147.76, where I will exit shorts and immediately open long positions in the opposite direction (expecting a 20–25-point pullback). Pressure on the pair will return in the case of weak data. Important! Before selling, make sure the MACD indicator is below the zero line and just starting to fall from it.

Scenario #2: I also plan to sell USD/JPY today in the case of two consecutive tests of 148.45, at the moment when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal downward. A decline toward 148.17 and 147.76 can then be expected.

What is shown on the chart:

• Thin green line – entry price for buying the instrument;
• Thick green line – suggested price for setting Take Profit or fixing profits manually, as further growth above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – suggested price for setting Take Profit or fixing profits manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to be guided by overbought and oversold zones.

Important. Beginner Forex traders must be very cautious in making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid sharp volatility. If you decide to trade during news releases, always place stop orders to minimize losses. Without them, you can quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember, successful trading requires a clear trading plan, such as the one outlined above. Spontaneous decisions based on current market conditions are, from the start, a losing strategy for an intraday trader.