Analysis of Trades and Trading Advice for the Japanese Yen

The test of the 158.16 level occurred when the MACD indicator had just begun moving down from the zero level, confirming that this was an appropriate entry point for selling the dollar. However, the pair did not decline, resulting in the position being closed at a loss.

Due to another decline in the yen, the risk of currency intervention is once again coming to the forefront. Japan is now returning from the holidays, while the yen is approaching the 160 per dollar level, which many view as a kind of test of the authorities' tolerance for further weakening of the national currency. I believe that a rapid break above this threshold would significantly increase the likelihood of official intervention, although the sustainability of any potential reversal would largely depend on whether Washington supports such measures and how willing Tokyo is to accelerate the normalization of its own policy rate rather than simply threaten intervention.

Another factor for USD/JPY today will be the US economic calendar, although the data themselves appear secondary. Initial jobless claims are forecast at 201,000. New Home Sales, which previously declined to 607,000 on an annualized basis, are also unlikely to provide much support for the yen against the dollar. In my view, much more important for the dollar will be speeches by Thomas Barkin, Beth Hammack, and John Williams, with particular attention on Williams—the only one of the three who has previously maintained a cautious tone regarding the gradual slowdown in inflation and focused on a neutral rate of around 1%. If even Williams aligns himself with his colleagues' more hawkish position today, this would be a strong signal for the market and could partially outweigh the threat of Japanese intervention.

As for the intraday strategy, I will place greater emphasis on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy USD/JPY when the entry point around 159.06 is reached (the green line on the chart), with a target of rising toward 159.58 (the thicker green line on the chart). Around 159.58, 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 potential for such a move is relatively limited. Important! Before buying, make sure that the MACD indicator is above the zero level and is just beginning to rise from it.

Scenario No. 2: Today, I also plan to buy USD/JPY if the price tests 158.58 twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal to the upside. A rise toward the opposite levels of 159.06 and 159.58 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell USD/JPY after the 158.58 level is broken (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 157.95, 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. Downward pressure on the pair will return today if the central bank intervenes. Important! Before selling, make sure that the MACD indicator is below the zero level and is just beginning to decline from it.

Scenario No. 2: Today, I also plan to sell USD/JPY if the price tests 159.06 twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal to the downside. A decline toward the opposite levels of 158.58 and 157.95 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 orders can be placed or profits can be closed 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 orders can be placed or profits can be closed manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold zones into account.

Important. Beginner Forex traders should exercise extreme 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 price fluctuations. If you decide to trade during news releases, always use stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use money management and trade large volumes.

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.