Trade Analysis and Recommendations for the Japanese Yen

The 151.90 price test in the first half of the day occurred when the MACD indicator had just started moving upward from the zero mark, confirming a valid entry point for buying the U.S. dollar. As a result, the pair gained over 25 points, followed by a decline in dollar demand.

This decline occurred ahead of key U.S. labor market data releases. The Nonfarm Payrolls (NFP) and unemployment rate are critical economic indicators that could impact the USD. Weak data may trigger a new wave of selling in USD/JPY, as it would further widen the monetary policy gap between the U.S. and Japan. The University of Michigan Consumer Sentiment Index and inflation expectations will also be important, with additional focus on the speeches of FOMC members Michelle Bowman and Adriana Kugler.

The Consumer Sentiment Index helps assess overall economic confidence and its impact on consumer spending, which directly affects economic growth. Inflation expectations play a major role in monetary policy, influencing both consumer and investor sentiment regarding future price trends. FOMC speeches from Bowman and Kugler could provide insights into future Fed policy and interest rate decisions, making them a key focus for the market.

For intraday trading, I will focus on Scenario #1 and Scenario #2, aligned with the ongoing bearish trend.

Buy Signal

Scenario #1: Buy USD/JPY at 152.30 (green line) with a target of 153.17. At 153.17, I will exit long positions and consider selling for a 30-35 point pullback. A bullish move is expected only after strong U.S. economic data.

Important! Before buying, ensure that the MACD indicator is above zero and just starting to rise.

Scenario #2: Buy USD/JPY after two consecutive tests of 151.95 if the MACD indicator is in the oversold zone. This would limit the downward potential and likely trigger a reversal upward. Target levels: 152.30 and 153.17.

Sell Signal

Scenario #1: Sell USD/JPY after it breaks below 151.95 (red line), triggering a sharp decline with a target level of 151.36, where I will exit shorts and consider a reversal buy (for a 20-25 point retracement). Selling pressure could increase if U.S. data is weak.

Important! Before selling, ensure that the MACD indicator is below zero and just starting to decline.

Scenario #2: Sell USD/JPY after two consecutive tests of 152.30, if the MACD indicator is in the overbought zone. This would limit the upward potential and signal a market reversal downward. Target levels: 151.95 and 151.36.

Chart Explanation

• Thin green line: Entry price for long trades.
• Thick green line: Take profit level (growth beyond this level is unlikely).
• Thin red line: Entry price for short trades.
• Thick red line: Take profit level (further downside is unlikely).
• MACD Indicator: Key signal for overbought and oversold conditions.

Important Notes for Beginner Traders

Exercise caution when making trading decisions. Avoid entering positions before major economic reports to prevent getting caught in sharp price fluctuations. If you trade during news events, always use stop-loss orders to minimize potential losses.

Trading without stop-loss orders can result in rapid capital depletion, especially when trading large volumes without proper risk management. A well-structured trading plan is essential—random impulsive trades based on short-term market movements are a losing strategy for intraday traders.