Trade Analysis and Tips for the Japanese Yen

The price test at 154.75 coincided with the MACD indicator moving significantly below the zero mark, which limited the pair's downside potential. For this reason, I did not sell the dollar.

Yesterday marked the return to work for the US government. President Trump signed the H.R. 5371 bill, effectively ending the longest government shutdown in US history. The dollar rose against the Japanese yen following this event. The resumption of funding was a breath of fresh air for a large number of federal employees who had been forced to take unpaid leave. It is evident that they will receive compensation for the forced downtime, allowing them to return to normal life and avoid exacerbating their financial situation caused by the shutdown.

Today's data on the growth of the purchasing price index for goods for Japanese corporations had no impact on the USD/JPY pair. The explanation for this apparent insensitivity likely lies in several factors that collectively weakened the potential impact of the data. First and foremost, markets have been awaiting more substantial signals from the Japanese government on future stimulus and economic support. Secondly, the published IPI index may be perceived as insufficient to reflect the overall inflationary pressure in the Japanese economy. Market participants are likely to pay greater attention to consumer inflation data, viewing them as a more direct indicator of household welfare and, thus, a potential trigger for a change in Bank of Japan policy.

Regarding the intraday strategy, I will primarily rely on the implementation of Scenario #1 and Scenario #2.

Buy Scenarios

• Scenario #1: I plan to buy USD/JPY today upon reaching an entry point around 155.01 (green line on the chart), targeting a move to 155.43 (thicker green line on the chart). At around 155.43, I will exit my long positions and open shorts in the opposite direction, anticipating a movement of 30-35 pips from the entry point. 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 is just beginning to rise from it.
• Scenario #2: I also plan to buy USD/JPY today if there are two consecutive tests of 154.81 while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. One can expect growth to the opposing levels of 155.01 and 155.43.

Sell Scenarios

• Scenario #1: I plan to sell USD/JPY today only after the 154.81 level (red line on the chart) is reached, which will trigger a rapid decline in the pair. The key target for sellers will be the 154.36 level, where I intend to exit the shorts and immediately buy in the opposite direction, anticipating a move of 20-25 pips from that level. It is better to sell as high as possible. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning to decline from it.
• Scenario #2: I also plan to sell USD/JPY today if there are two consecutive tests of 155.01 while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. One can expect a decrease to the opposing levels of 154.81 and 154.36.

What the Chart Shows:

• Thin Green Line: Entry price for buying the trading instrument.
• Thick Green Line: Estimated price where Take Profit can be set or where profit can be secured, as further increases above this level are unlikely.
• Thin Red Line: Entry price for selling the trading instrument.
• Thick Red Line: Estimated price where Take Profit can be set or where profit can be secured, as further decreases below this level are unlikely.
• MACD Indicator: When entering the market, it is important to be guided by the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making trading entry decisions. It is best to remain out of the market before the release of important fundamental reports to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember that successful trading requires having a clear trading plan, similar to the one I presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.