Trade Analysis and Tips for Trading the Japanese Yen

The price test of 155.69 occurred when the MACD indicator had already moved significantly below the zero line, limiting the pair's downward potential. For this reason, I did not sell the dollar. The second test of 155.69 coincided with the MACD being in the oversold area, which led to the implementation of Scenario #2 for buying the dollar. However, the pair failed to rise, resulting in the position being closed at a loss.

The chart clearly shows that the yen continues to strengthen actively against the dollar, with ongoing currency interventions remaining the main driver. This is no longer a one-off episode but sustained support for the national currency, which, in my view, fundamentally changes the balance of forces in USD/JPY. Another factor favoring the yen today is the absence of the U.S. session due to the Labor Day holiday in the United States. Without major market participants, there is little source of demand for the dollar to counter pressure from the authorities. I believe that under these conditions, the decline in USD/JPY may continue, as dollar buyers have to take the real risk of another intervention into account and are in no hurry to trade against the prevailing trend. As long as the authorities demonstrate a willingness to intervene and the market remains thin, the yen retains a clear advantage. I continue to believe that as long as interventions continue, any attempts by the pair to reverse upward will face resistance. Therefore, in the near term, I expect continued pressure on the dollar against the Japanese currency.

As for the intraday strategy, I will focus more on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy USD/JPY when the entry point is reached around 154.86 (the green line on the chart), with a target of 155.34 (the thicker green line on the chart). Around 155.34, I will exit the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. A rise in the pair can be expected today, but the prospects are rather limited. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario #2: Today, I also plan to buy USD/JPY if the price tests 154.58 twice consecutively while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal of the market to the upside. A rise toward the opposite levels of 154.86 and 155.34 can be expected.

Sell Signal

Scenario #1: Today, I plan to sell USD/JPY after the price breaks below 154.58 (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 154.15, where I will exit the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Selling pressure on the pair is likely to return if the central bank intervenes. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario #2: Today, I also plan to sell USD/JPY if the price tests 154.86 twice consecutively while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal of the market to the downside. A decline toward the opposite levels of 154.58 and 154.15 can be expected.

What Is Shown on the Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated price at which Take Profit can be placed or profits can be taken manually, 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 estimated price at which Take Profit can be placed or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold areas into account.

Important. Beginner Forex traders should exercise great caution when making decisions about entering the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid exposure to sharp exchange-rate fluctuations. If you decide to trade during the release of economic news, always place stop orders to minimize losses. Without stop orders, you can lose your entire trading account very quickly, especially if you do not use proper money management and trade large position sizes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.