Trade review and tips for trading the Japanese yen

The test of 147.71 in the first half of the day occurred when the MACD indicator had already moved significantly below the zero mark, which limited the pair's downward potential. For this reason, I did not sell the dollar and missed a small downward move of the pair.

In the second half of the day, USD/JPY will be influenced by US manufacturing PMI, services PMI, and the composite PMI. These indicators, acting as a litmus test of the world's largest economy, traditionally have a strong impact on currency pair dynamics. The services PMI will be especially important, as it reflects consumer sentiment and the overall health of the US economy. Only in the case of very strong PMI readings will the pair return to growth. Also scheduled today is a speech by Federal Reserve Chair Jerome Powell, which should be followed closely. If his rhetoric turns out dovish, it may trigger a decline in the dollar, leading to a drop in USD/JPY as well.

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

Buy signal

Scenario #1: I plan to buy USD/JPY today at the entry point around 147.85 (green line on the chart) with a target at 148.16 (thicker green line on the chart). Around 148.16, I will exit long positions and open shorts in the opposite direction (expecting a 30–35-point move back from the level). A continuation of the bullish market supports this scenario. Important! Before buying, make sure the MACD indicator is above the zero mark and just beginning to rise.

Scenario #2: I also plan to buy USD/JPY in case of two consecutive tests of 147.71, when the MACD indicator is in oversold territory. This will limit the pair's downward potential and trigger an upward reversal. Growth toward 147.85 and 148.16 can then be expected.

Sell signal

Scenario #1: I plan to sell USD/JPY after a break of 147.71 (red line on the chart), which will lead to a rapid decline. The key target for sellers will be 147.42, where I will exit shorts and immediately open longs in the opposite direction (expecting a 20–25-point bounce). Pressure on the pair will persist if policymakers' stance remains dovish. Important! Before selling, make sure the MACD indicator is below the zero mark and just beginning to decline.

Scenario #2: I also plan to sell USD/JPY in case of two consecutive tests of 147.85, when the MACD indicator is in overbought territory. This will cap the pair's bullish potential and trigger a downward reversal. A decline toward 147.71 and 147.42 can then be expected.

What's on the chart:

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

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

And remember: successful trading requires a clear trading plan, like the one presented above. Making spontaneous trading decisions based only on current market conditions is an inherently losing strategy for an intraday trader.