Trade Analysis and Tips for Trading the Japanese Yen

The price test at 159.39 coincided with the MACD indicator just starting to move upward from the zero mark, confirming it as a good buying entry point for the dollar. As a result, the pair increased by 20 pips.

The Japanese yen continues to face pressure amid escalating geopolitical tensions in the Middle East. Recent events involving Iran's seizure of several commercial vessels in the strategically significant Strait of Hormuz have renewed investors' interest in the U.S. dollar as a traditional safe-haven asset. This, in turn, has strengthened the USD/JPY currency pair. This scenario unfolds against the backdrop of existing yen weakness. Deteriorating global economic conditions and rising uncertainty in the Middle East are only amplifying this trend, pushing investors to withdraw capital from riskier assets, including the Japanese currency.

Today's data on Japan's manufacturing sector business activity index showed improvement, but failed to support the yen in its quest to strengthen against the U.S. dollar. Despite encouraging signals from the manufacturing sector, which traditionally supports the rise of the national currency, the yen remains under pressure. This phenomenon is likely linked to broader global economic influences and existing divergences in monetary policy.

Regarding the intraday strategy, I will primarily rely on implementing scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today when the price reaches around 159.63 (green line on the chart), targeting a move to 160.00 (thicker green line on the chart). At around 160.00, I will exit the long positions and open short positions in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from this level). Growth in the pair today can be anticipated only if there is a firm stance from the US and Iran. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning its upward movement from there.

Scenario #2: I also plan to buy USD/JPY today if there are two consecutive tests of 159.50 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and may lead to an upward market reversal. An increase can be expected toward the opposite levels of 159.63 and 160.00.

Sell Signal

Scenario #1: I plan to sell USD/JPY today after the price drops below 159.50 (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 159.17 level, where I will exit the short positions and also immediately open long positions in the opposite direction (expecting a 20-25-pip move in the opposite direction from this level). Pressure on the pair today will return with positive news from the Middle East. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning its downward movement from there.

Scenario #2: I also plan to sell USD/JPY today if there are two consecutive tests of 159.63 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and may lead to a market reversal downward. A decrease can be expected toward the opposite levels of 159.50 and 159.17.

What Is On The Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the expected price where Take Profit can be set, or profits can be secured, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the expected price where Take Profit can be set, or profits can be secured, as further decline below this level is unlikely;
• MACD Indicator. It is important to be guided by overbought and oversold zones upon entering the market.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to be out of the market before important fundamental reports are released to avoid being caught in sharp price fluctuations. If you choose 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 do not use money management and trade large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.