Trade analysis and recommendations for trading the Japanese yen

The 153.70 price test occurred when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential. For that reason, I did not sell the dollar.

It seems that after yet another round of verbal intervention threats from Japan's Finance Minister during the Asian session today, there's little left to support the yen, and those willing to buy it are gradually decreasing. Unless actual intervention occurs—and not just talk and concern over the exchange rate—it's unlikely we'll see a significant decline in the USD/JPY pair.

The lack of clear signals from the Bank of Japan regarding potential interest rate hikes is also discouraging yen buyers. Investors are waiting for clearer and more decisive action, but for now, the reality is that the tough rhetoric remains just words. Under such conditions, USD/JPY may continue to strengthen in favor of the dollar, as the Federal Reserve's stability and transparency appear more attractive amid global financial volatility.

Later today, FOMC member Michelle Bowman is scheduled to speak, and her hawkish tone could once again lead to growth in the USD/JPY pair. Investors are eagerly awaiting her comments, as they could have a significant impact on the currency market, especially in light of recent exchange rate fluctuations. Bowman, known for her confident and firm stance, may reinforce traders' belief that the Federal Reserve will maintain a restrictive monetary policy.

As for intraday strategy, I will primarily focus on Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today at the entry point around 153.75 (green line on the chart), targeting growth to 154.36 (thicker green line on the chart). Around 154.36, I will exit the buy trades and open sell positions in the opposite direction, expecting a 30–35-point pullback from that level. A rise in the pair can only be expected following a hawkish stance by the Federal Reserve.Important: Before buying, make sure the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY if the price tests 153.26 twice while the MACD is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upward. Growth toward 153.75 and 154.36 can then be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY today after the 153.26 level is broken (red line on the chart), which should lead to a quick decline in the pair. The key target for sellers will be 152.67, where I plan to exit sell positions and open buy trades in the opposite direction, expecting a 20–25-point pullback from that level. Downward pressure on the pair may return if the Federal Reserve adopts a dovish stance. Important: Before selling, make sure the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario #2: I also plan to sell USD/JPY if the price tests 153.75 twice while the MACD is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline toward 153.26 and 152.67 can then be expected.

Chart Explanation:

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

Important Notes

Beginner Forex traders should be extremely cautious when deciding to enter the market. Before the release of major fundamental reports, it's best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit, especially if you don't use money management and trade with large volumes.

And remember: successful trading requires a clear trading plan, like the one outlined above. Spontaneous trading decisions based solely on the current market situation are an inherently losing strategy for an intraday trader.