Trade Analysis and Recommendations for Trading the Japanese Yen

The price test at 146.76 occurred when the MACD indicator had already moved far below the zero line, limiting the pair's downward potential. A second test of 146.76 happened when the MACD was in oversold territory, enabling the execution of Scenario #2 for a buy trade, though a significant rise in the dollar did not follow.

It is clear that news of the U.S.–Japan trade agreement continues to support the yen. The economic ties between these two giants form a complex system of interdependencies, and any movement toward strengthening those ties inevitably impacts currency markets. Investors, reassessing Japan's growth prospects within the context of a new trade partnership, are showing greater interest in the yen, supporting its appreciation. However, it's important to remember that other factors influence the yen's rate as well. The Bank of Japan's monetary policy, which is shifting toward a more hawkish stance, creates additional conditions for the yen's growth. With the new trade agreement in place, the regulator has fewer reasons to maintain rates at current levels—another positive factor for the yen.

There are no significant U.S. statistics scheduled for the second half of the day, and housing market data is unlikely to reverse the bullish trend in the Japanese yen against the U.S. dollar.

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

Buy Signal

Scenario #1: I plan to buy USD/JPY today at the entry point around 146.56 (green line on the chart), aiming for a rise to 147.26 (thicker green line on the chart). Around 147.26, I will exit long trades and open short positions in the opposite direction (targeting a 30–35 point reversal). A strong rise in the pair can only be expected with very strong data. Important: Before buying, ensure the MACD is above the zero line and just starting to move up.

Scenario #2: I also plan to buy USD/JPY if the price tests 145.96 twice in a row, at a time when the MACD is in oversold territory. This would limit the pair's downward potential and lead to a reversal to the upside. A rise to the opposite levels of 146.56 and 147.26 can be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY after the price breaks below 145.96 (red line on the chart), which may lead to a quick drop in the pair. The sellers' key target will be 145.39, where I plan to exit short trades and open long ones in the opposite direction (targeting a 20–25 point rebound). Downward pressure on the pair may return at any moment today. Important: Before selling, ensure the MACD is below the zero line and just starting to decline.

Scenario #2: I also plan to sell USD/JPY if the price tests 146.56 twice in a row while the MACD is in overbought territory. This would limit the pair's upward potential and trigger a reversal downward. A decline to the opposite levels of 145.96 and 145.39 can then be expected.

Chart Legend

• Thin green line – entry price for buying the trading instrument
• Thick green line – suggested Take Profit level or point to manually fix profits, as further growth beyond this level is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – suggested Take Profit level or point to manually fix profits, as further decline beyond this level is unlikely
• MACD indicator – when entering the market, use overbought and oversold zones as reference

Important Note

Beginner Forex traders must be very cautious when making entry decisions. Before the release of key fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize losses. Without stop-losses, you can very quickly lose your entire deposit, especially if you don't use money management and trade large volumes.

And remember: successful trading requires a clear trading plan—like the one I outlined above. Making spontaneous trading decisions based on current market conditions is a losing strategy for any intraday trader.