Review of Trades and Trading Tips for the Japanese Yen

The test of the 160.21 level occurred when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential. For this reason, I did not open any short positions.

Retail sales data will be released shortly, but the key event will be the Federal Open Market Committee's (FOMC) decision on the benchmark interest rate. The rate is expected to remain unchanged, but market participants will be far more interested in the first press conference of the new FOMC Chair, Kevin Warsh. His statements and any hints regarding future monetary policy will have a significant impact on the markets.

Warsh is expected to adopt a dovish stance, which was reportedly one of the reasons Donald Trump supported his nomination as Federal Reserve Chair. However, market conditions suggest otherwise. Persistently high inflation is likely to force the new Fed Chair to move away from dovish rhetoric, potentially resulting in a more hawkish stance. Particular attention will be paid to Warsh's comments on labor market conditions, inflation expectations, and economic growth prospects.

If, however, Warsh adopts a more cautious approach, emphasizing the need for continued monitoring of inflation risks, this would be interpreted as a relatively dovish signal and could significantly weaken the US dollar against the Japanese yen.

As for intraday trading, I will primarily rely on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy USD/JPY if the price reaches the entry level around 160.33 (green line on the chart), targeting a rise to 160.71 (the thicker green line on the chart). Around 160.71, I plan to close long positions and open short positions in the opposite direction, targeting a 30–35 point move from that level. Further gains in the pair are likely only if US economic data comes in stronger than expected.

Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to move higher from it.

Scenario No. 2: I also plan to buy USD/JPY if the 160.13 level is tested twice consecutively while the MACD indicator is in oversold territory. This would limit the pair's downward potential and trigger an upward market reversal. In this case, a move toward 160.33 and 160.71 can be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY after a break below the 160.13 level (red line on the chart), which could trigger a rapid decline in the pair. The key downward target will be 159.51, where I intend to close short positions and immediately open long positions in the opposite direction, targeting a 20–25 point rebound. Pressure on the pair may return today if the central bank intervenes in the currency market.

Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to move lower from it.

Scenario No. 2: I also plan to sell USD/JPY if the 160.33 level is tested twice consecutively while the MACD indicator is in overbought territory. This would limit the pair's upward potential and trigger a downward market reversal. In this case, a decline toward 160.13 and 159.51 can be expected.

Chart Notes:

• Thin green line – entry price for buy positions;
• Thick green line – estimated Take Profit level or an area where profits may be manually secured, as further gains above this level are unlikely;
• Thin red line – entry price for sell positions;
• Thick red line – estimated Take Profit level or an area where profits may be manually secured, as further declines below this level are unlikely;
• MACD indicator – when entering the market, it is important to consider overbought and oversold conditions.

Important. Beginner Forex traders should exercise extreme caution when making market entry decisions. Before major economic reports are released, it is often best to remain out of the market to avoid sharp price swings. If you decide to trade during news releases, always use stop-loss orders to minimize potential losses. Without stop-loss orders, you can lose your entire trading account very quickly, especially if you trade large positions without proper risk management.

Remember that successful trading requires a clear trading plan, such as the one outlined above. Spontaneous trading decisions based solely on current market conditions are generally a losing strategy for intraday traders.