Trade analysis and recommendations for trading the Japanese yen

There were no tests of the levels I marked in the first half of the day, so I had no trades.

In the second half of the day, figures on U.S. initial jobless claims and the trade balance are expected. Weak statistics will lead to a new decline in the USD/JPY pair. The market's reaction to the data release will be immediate, as traders closely monitor these indicators, which serve as important signals of the U.S. economy's condition. An increase in initial jobless claims indicates a slowdown in the labor market, which may negatively impact economic growth and the U.S. dollar's position against the Japanese yen. A negative trade balance—meaning imports exceed exports—also points to economic weakness and declining competitiveness of U.S. goods on the global market.

If extremely negative data is released, increased pressure on the U.S. dollar may be expected, similar to yesterday's session. However, it is worth noting that the market does not always react unambiguously to economic indicators. Sometimes investors' expectations are already priced in, and the actual data does not have a significant impact. In addition, future USD/JPY dynamics will be influenced by factors such as the Bank of Japan's upcoming rate decision next week.

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

Buy Signal

Scenario No. 1: Today, I plan to buy USD/JPY at the entry point around 156.01 (green line on the chart) with the goal of rising to 156.61 (thicker green line on the chart). Around 156.61, I will exit buy trades and open sell trades in the opposite direction (expecting a 30–35-point move back from that level). You can count on growth in the pair only after strong U.S. data. Important! Before buying, make sure the MACD indicator is above the zero mark and is just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in case of two consecutive tests of 155.74 while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger a reversal upward. Growth toward the opposite levels of 156.01 and 156.61 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell USD/JPY after the level of 155.74 (red line on the chart) is updated, which will lead to a rapid decline in the pair. The key target for sellers will be 155.29, where I will exit sell trades and immediately open buy trades in the opposite direction (expecting a 20–25-point move back from the level). Pressure on the pair will return only if the data is weak. Important! Before selling, make sure the MACD indicator is below the zero mark and is just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today in case of two consecutive tests of 156.01 while the MACD indicator is in the overbought zone. This will limit the upward potential and trigger a reversal downward. A decline toward the opposite levels of 155.74 and 155.29 can be expected.

Chart Legend:

• Thin green line – entry price at which the trading instrument can be bought
• Thick green line – suggested price for placing Take Profit or manually securing profit, as further growth above this level is unlikely
• Thin red line – entry price at which the trading instrument can be sold
• Thick red line – suggested price for placing Take Profit or manually securing profit, as further decline below this level is unlikely
• MACD indicator – when entering the market, it is important to follow overbought and oversold zones

Important

Beginner Forex traders must be extremely cautious when deciding to enter the market. Before major fundamental report releases, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you ignore money management and trade large volumes.

And remember: for successful trading, you need a clear trading plan, like the one I presented above. Spontaneous trading decisions based solely on the current market situation are, from the start, a losing strategy for an intraday trader.