Trade Review and Advice on Trading the Japanese Yen

The test of the 145.17 price level coincided with the MACD being in the overbought zone, which limited the pair's upward potential. For that reason, I did not buy the dollar and missed out on a good move.

In the second half of the day, the yen may react quite strongly to the U.S. new home sales data and the speech by Federal Reserve Chair Jerome Powell. This seemingly local U.S. data and the Fed Chair's rhetoric could trigger volatility in global currency markets, particularly affecting the Japanese yen's performance against the dollar.

New home sales figures are an important indicator of the U.S. economy, reflecting consumer confidence and construction sector activity. If the numbers come in below expectations, concerns about slowing economic growth in the U.S. may intensify, reducing the dollar's appeal and triggering a correction in USD/JPY.

Powell's speech, meanwhile, gives investors the chance to assess the Fed's stance on future monetary policy. The market will be looking for hints as to how aggressively the Fed plans to continue its fight against inflation. If Powell, as he did yesterday, signals a more cautious approach, it could weaken the dollar.

As for the intraday strategy, I'll be relying more on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today at the entry point around 145.87 (green line on the chart) with a target of rising to 146.31 (thicker green line on the chart). Around 146.31, I will exit long positions and open shorts in the opposite direction, expecting a 30–35 point correction downward. A strong rise in the pair can be expected only if the data is strong. Important! Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.

Scenario #2: I also plan to buy USD/JPY today if the price tests 145.56 twice in a row, while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal upward. Growth to the opposite levels of 145.87 and 146.31 can be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY today after a break below 145.56 (red line on the chart), which may trigger a quick decline in the pair. The main target for sellers will be 145.16, where I will exit shorts and immediately open long positions in the opposite direction, expecting a 20–25 point rebound. Significant selling pressure is unlikely to return today.Important! Before selling, make sure the MACD indicator is below the zero line and just beginning to decline from it.

Scenario #2: I also plan to sell USD/JPY today if the price tests 145.87 twice in a row, while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline to the opposite levels of 145.56 and 145.16 can be expected.

Chart Key:

• Thin green line – entry price for long positions
• Thick green line – projected Take Profit level or a suggested point to manually fix profit, as further growth above this level is unlikely
• Thin red line – entry price for short positions
• Thick red line – projected Take Profit level or a suggested point to manually fix profit, as further decline below this level is unlikely
• MACD indicator – entry decisions should be guided by overbought/oversold zones

Important:Beginner traders in the Forex market must be extremely cautious when making entry decisions. It's best to stay out of the market before the release of major fundamental reports to avoid being caught in sharp price swings. If you choose to trade during news releases, always set stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit, especially if you don't apply money management and trade with large volumes.

And remember, successful trading requires a clear trading plan—like the one outlined above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for intraday traders.