Analysis of Trades and Trading Tips for the Japanese Yen

The test of the 143.75 price level in the first half of the day occurred when the MACD indicator had already significantly declined from the zero line, which limited the pair's downside potential. A second test of 143.75 shortly afterward, while MACD was in oversold territory, led to the implementation of Scenario #2 for buying, resulting in a gain of over 40 pips for the pair.

The U.S. Producer Price Index (PPI) for May is ahead. The Bank of Japan's tightening of monetary policy, in contrast to the more cautious actions of the Federal Reserve, creates a favorable backdrop for continued dollar weakness. Yesterday's U.S. consumer price data, which showed slowing inflation, further reinforced these expectations. If the PPI confirms this trend, pressure on the dollar will increase. However, one must not overlook potential risks. Any unexpected comments from Fed officials hinting at a prolonged pause could trigger a short-term dollar rebound.

For intraday strategy, I will focus primarily on implementing Scenarios #1 and #2.

Buy Scenario

Scenario #1: I plan to buy USD/JPY today at the entry point around 143.77 (green line on the chart), aiming for a rise to 144.26 (thicker green line). Around 144.26, I will exit long positions and open short ones on the pullback (expecting a 30–35 pip reversal). A strong pair rally today is possible following robust data.

Important! Before buying, ensure the MACD indicator is above the zero mark and beginning to rise.

Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the 143.36 level while MACD is in oversold territory. This would cap the pair's downside potential and trigger an upward reversal. A move toward 143.77 and 144.26 can be expected.

Sell Scenario

Scenario #1: I plan to sell USD/JPY today after a break below 143.36 (red line on the chart), which could lead to a swift decline in the pair. The main target for sellers will be 142.78, where I will exit short positions and open long ones on the rebound (expecting a 20–25 pip reversal). Selling pressure may return on weak data.

Important! Before selling, make sure the MACD indicator is below the zero line and beginning to decline.

Scenario #2: I also plan to sell USD/JPY today in the event of two consecutive tests of the 143.77 level while MACD is in overbought territory. This would limit the pair's upside potential and lead to a reversal downward. A decline toward 143.36 and 142.78 can be expected.

What's on the Chart:

• The thin green line represents the entry price where the trading instrument can be bought.
• The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
• The thin red line represents the entry price where the trading instrument can be sold.
• The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
• The MACD indicator should be used to assess overbought and oversold zones when entering the market.

Important Notes:

• Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
• Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.