Trade review and tips for trading the Japanese yen

The test of the 158.89 price level occurred when the MACD indicator had just begun moving downward from the zero line, which confirmed a valid entry point for selling the dollar. However, the pair did not develop a significant decline in the dollar.

It appears that traders do not believe in a complete breakdown of dialogue between Iran and the United States, preferring instead to bet on the rise of risk assets. Despite occasional sharp or defensive statements, the overall market atmosphere suggests that most participants believe diplomatic efforts will prevail. This cautious optimism is reflected in the connection between geopolitical developments and market fluctuations. Signs of progress, or even hints of the possibility of dialogue, would likely trigger a positive market reaction, resulting in buying of the Japanese yen. Conversely, concerns about negotiations breaking down lead to some nervousness and a rise in USD/JPY. Given that there is no U.S. economic data in the second half of the day, all attention will remain focused on developments in the Middle East. Actions and statements from U.S. and Iranian officials regarding a peace agreement will be decisive.

As for the intraday strategy, I will mainly rely on scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today I plan to buy USD/JPY at an entry point around 158.98 (green line on the chart) with a target of 159.34 (thicker green line on the chart). Around 159.34, I will exit long positions and open short positions in the opposite direction (targeting a 30–35 point move back from the level). A rise in the pair today may occur if the U.S. and Iran take a hardline stance.Important: Before buying, make sure the MACD indicator is above the zero line and just beginning to rise from it.

Scenario No. 2: I will also consider buying USD/JPY if there are two consecutive tests of the 158.83 level while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and trigger an upward reversal. Growth toward 158.98 and 159.34 can be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY after a break below 158.83 (red line on the chart), which would lead to a quick decline in the pair. The main target for sellers is 158.56, where I will exit short positions and immediately open long positions in the opposite direction (targeting a 20–25 point rebound). Pressure on the pair may return today if there is a push for compromise.Important: Before selling, make sure the MACD indicator is below the zero line and just starting to decline.

Scenario No. 2: I will also consider selling USD/JPY if there are two consecutive tests of the 158.98 level while the MACD indicator is in the overbought zone. This would limit upward potential and trigger a downward reversal. A decline toward 158.83 and 158.56 can be expected.

Chart Notes

• Thin green line – entry price for buying the instrument;
• Thick green line – estimated Take Profit level or area to lock in profits, as further growth above this level is unlikely;
• Thin red line – entry price for selling the instrument;
• Thick red line – estimated Take Profit level or area to lock in profits, as further decline below this level is unlikely;
• MACD indicator – when entering trades, it is important to follow overbought and oversold zones.

Important: Beginner Forex traders should be very cautious when making trading decisions. It is best to stay out of the market before important fundamental reports are released to avoid sharp price volatility. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit—especially if you do not use proper money management and trade large volumes.

And remember: successful trading requires a clear trading plan, such as the one presented above. Spontaneous decision-making based on current market conditions is a losing strategy for intraday traders.