Trade Review and Strategy for the Japanese Yen

A price test at 151.17 occurred while the MACD indicator was beginning to rise from the zero line, confirming a valid entry point for buying the U.S. dollar. As a result, the pair gained more than 40 pips.

The yen continued to rapidly lose ground against the dollar following yesterday's comments from Federal Reserve officials. Specifically, remarks from Minneapolis Fed President Neel Kashkari — who warned that a sharp decrease in interest rates could lead to a surge in inflation — triggered a rally in the dollar and further weakness in the yen.

However, the yen's current weakness is also driven by domestic factors. Following Sanae Takaichi's election victory, who has been critical of rate hikes, Bank of Japan Governor Kazuo Ueda may face a much tougher political environment in the second half of his five-year term. If the central bank is pressured to align with Takaichi's position, the yen is likely to remain under pressure and continue its decline.

Today, I will focus primarily on executing Buy Scenarios 1 and 2, as well as Sell Scenarios 1 and 2.

Buy Scenarios

Scenario 1: I plan to buy USD/JPY today if the price hits the entry point around 152.58. The upside target will be 153.24, where I expect to close the long position and then open a short position in the opposite direction, aiming for a 30–35 pip correction. The best time to look for longs in this pair is generally during pullbacks or deeper corrections in the USD/JPY pair. Ensure the MACD is above the zero line and is just starting to rise before entering.

Scenario 2: I also plan to buy the pair if there are two consecutive tests of the 152.26 level while the MACD is in the oversold zone. This would limit the downside and likely trigger an upward reversal. A rise back toward 152.58 and 153.24 may be expected in this case.

Sell Scenarios

Scenario 1: I plan to sell USD/JPY only after a confirmed breakout of the 152.26 level. This scenario would likely trigger a swift decline, with the key target area around 151.61 being the exit point for short positions and an opportunity to switch to buying on a 20–25 pip correction. As always, selling should be done from the highest possible price point. Ensure the MACD is below the zero line and is just starting to move downward before entering.

Scenario 2: I will also consider selling if the price tests 152.58 twice in a row while the MACD is in overbought territory. This would limit the pair's upward potential and signal a likely reversal to the downside, targeting 152.26 and 151.61 as potential downside levels.

Chart Annotations:

A thin green line represents the suggested entry price for long trades.

A thick green line marks the target area for taking profit on long trades, as movement beyond this level is unlikely.

A thin red line shows the entry level for short positions.

A thick red line indicates the zone where profits may be taken on short trades because further decline is less likely.

The MACD indicator should guide your entry decision based on overbought or oversold conditions.

Important Notes for Beginner Forex Traders:

If you are starting out on the forex market, exercise extreme caution when entering trades — especially before major data releases. The best approach is often to stay out of the market during those times to avoid sudden price spikes.

If you choose to trade during news events, always use a Stop-Loss to minimize potential losses. Trading without it — especially in high volumes and without proper money management — can quickly lead to a complete loss of your capital.

Finally, remember that no strategy guarantees constant success. Developing and following a consistent trading plan, such as the one provided above, is crucial for achieving long-term results. Acting spontaneously based on short-term market noise is almost always a losing approach for intraday traders.