Trade Analysis and Tips for the Japanese Yen

The price test at 157.99 occurred when the MACD indicator was just beginning to move up from the zero mark, confirming the correct entry point for buying the dollar. As a result, the pair rose to the target level of 158.33.

The data released today showed that corporate goods prices in Japan rose the most in 12 years in April, another sign that the war in Iran is intensifying inflationary pressures. All of this led to an increase in the yields of Japanese government bonds across the yield curve, exerting strong pressure on the yen against the dollar.

The rise in commodity prices, fueled by geopolitical events, is putting significant pressure on the Japanese economy. Companies are forced to raise prices on their products to compensate for increased costs, which in turn affects final consumers. This inflationary impulse, although not as sharp as in some other countries, nevertheless creates certain risks for economic growth stability.

Against the backdrop of increasing inflationary pressure, the Bank of Japan faces a difficult choice. The traditional accommodative monetary policy aimed at stimulating the economy has already come into conflict with the need to contain price growth. This raises questions about the long-term effectiveness of current measures and forces investors to reassess their expectations for future monetary policy, creating even greater uncertainty in the currency market, as reflected in the yen's weakening.

As for the intraday strategy, I will rely more on implementing Scenarios #1 and #2.

Buying Scenarios

Scenario #1: I plan to buy USD/JPY today at the entry point around 158.70 (green line on the chart), with a target for growth to 159.27 (thicker green line on the chart). At 159.27, I intend to exit the long positions and open short positions in the opposite direction (anticipating a move of 30-35 pips in the opposite direction from the level). It is best to resume buying the pair on corrections and on serious dips in USD/JPY. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the price at 158.44 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth can be expected toward the opposite levels of 158.70 and 159.27.

Selling Scenarios

Scenario #1: I plan to sell USD/JPY today only after updating the 158.44 level (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the level of 157.93, where I intend to exit the shorts and also open longs immediately in the opposite direction (anticipating a movement of 20-25 pips in the opposite direction from the level). Sellers may return at any moment, especially with any hint from the central bank. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario #2: I also plan to sell USD/JPY today in the event of two consecutive tests of the price at 158.70 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline can be expected to the opposite levels of 158.44 and 157.93.

What is on the Chart:

• The thin green line – entry price at which the trading instrument can be bought;
• The thick green line – approximate price where take profit can be set or to realize profit, as further growth above this level is unlikely;
• The thin red line – entry price at which the trading instrument can be sold;
• The thick red line – approximate price where take profit can be set or to realize profit, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner traders in the Forex market need to make entry decisions very cautiously. It is best to stay out of the market before important fundamental reports to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, as outlined above. Making impulsive trading decisions based on the current market situation is fundamentally a losing strategy for an intraday trader.