Trade Analysis and Tips for Trading the Japanese Yen

The price test at 161.59 occurred at a time when the MACD indicator had moved significantly above the zero mark, limiting the pair's upward potential. For this reason, I did not buy the dollar.

So far, the yen has not reacted, but the Bank of Japan appears inclined towards further monetary policy tightening, as confirmed by details from discussions at the recent board meeting. Recently, the Japanese central bank raised the policy rate to its highest level since 1995, and this seems to be just the beginning. In a review of opinions from the June 15-16 meeting published on Wednesday, one of the nine board members noted that it is appropriate to continue raising the policy rate. This statement came in the context of core consumer price inflation approaching the target level of 2%, as well as maintaining favorable financial conditions. This indicates that the BoJ is ready to respond actively to evolving economic, inflationary, and financial realities to achieve sustained price growth.

However, this did not impress the yen. Traders are still awaiting currency interventions to strengthen the yen, as the rate hikes have not yet had a healing effect.

Regarding the intraday strategy, I will rely more on implementing scenarios No. 1 and No. 2.

Buy Scenarios

Scenario No. 1: I plan to buy USD/JPY today when the price reaches the entry point near 161.78 (green line on the chart), with a goal of rising to the level of 162.07 (thicker green line on the chart). Around 162.07, I intend to exit the long positions and open short positions in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from the level). It is best to return to longs on corrections and significant dips in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning its rise from there.

Scenario No. 2: I also plan to buy USD/JPY today in case of two consecutive tests at 161.59 while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. We can expect growth to opposing levels of 161.78 and 162.07.

Sell Scenarios

Scenario No. 1: I plan to sell USD/JPY today only after the 161.59 level is updated (red line on the chart), which will trigger a quick drop in the pair. The key target for sellers will be 161.37, where I intend to exit the shorts and immediately open longs in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Sellers will return at any moment; we just need a hint from the central bank. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning its decline from there.

Scenario No. 2: I also plan to sell USD/JPY today in case of two consecutive tests at 161.78, while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. We can expect a decline to opposing levels of 161.59 and 161.37.

What's on the Chart:

Thin green line – entry price for buying the trading instrument;

Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;

Thin red line – entry price for selling the trading instrument;

Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;

MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp 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 are not using money management and are trading large volumes.

And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.