Analysis of Trades and Recommendations for Trading the Japanese Yen

No tests of the levels I indicated occurred during the first half of the day. The very low volatility of USD/JPY prevented suitable entry points into the market.

The Japanese yen completely ignored an important economic growth report. According to the data, Japan's real GDP fell by 1.8% year-on-year in Q3. Compared to Q2, GDP decreased by 0.4%. Clearly, this unexpected decline casts doubt on optimistic forecasts for Japan's economic recovery in the near future without active government support. Analysts link the GDP contraction to several factors, including falling domestic demand, rising import energy prices, and a weakening global economy, negatively affecting Japanese exports.

The market had apparently expected more positive data but may have reacted cautiously, considering the expected government response to the situation. Further economic stimulus gives hope that the situation can be corrected. However, despite the yen's neutral reaction, the situation remains worrying for the Japanese government. Further GDP decline could increase pressure on the Bank of Japan to take more decisive measures to stimulate the economy, which, in turn, could negatively impact the national currency over the long term.

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

Buy Signal

Scenario #1:

Buy USD/JPY today at an entry point around 154.83 (green line on the chart) with a target of rising to 155.15 (thicker green line on the chart). Around 155.15, I plan to exit long positions and open short positions in the opposite direction (expecting a 30–35 point move). Growth in the pair is possible if the bullish market continues.Important! Before buying, ensure the MACD is above zero and just starting to rise.

Scenario #2:

I also plan to buy USD/JPY if there are two consecutive tests of 154.63 while the MACD is in the oversold area. This will limit the pair's downward potential and trigger a reversal upward. Growth toward the opposing levels 154.83 and 155.15 can be expected.

Sell Signal

Scenario #1:

Sell USD/JPY today after breaking 154.63 (red line on the chart), which should trigger a rapid decline. The key target for sellers is 154.21, where I plan to exit short positions and simultaneously open long positions in the opposite direction (expecting a 20–25 point rebound). Downward pressure on the pair is unlikely to return today.Important! Before selling, ensure the MACD is below zero and just starting to decline.

Scenario #2:

I also plan to sell USD/JPY if there are two consecutive tests of 154.83 while MACD is in the overbought area. This will limit the pair's upward potential and trigger a reversal downward. A decline toward the opposing levels 154.63 and 154.21 can be expected.

What's on the Chart:

• Thin green line – entry price for buying the instrument.
• Thick green line – suggested Take Profit level or point to manually secure profits; further growth above this level is unlikely.
• Thin red line – entry price for selling the instrument.
• Thick red line – suggested Take Profit level or point to manually secure profits; further decline below this level is unlikely.
• MACD indicator – when entering the market, use overbought and oversold zones as guidance.

Important Notes for Beginner Forex Traders

Beginner traders must be very cautious when deciding entry points. Before major fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If trading during news releases, always set stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit, especially if money management is ignored and large volumes are traded.

Remember: successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on current market conditions are inherently a losing strategy for intraday traders.