Trade Review and Trading Tips for the Japanese Yen

The price test at 155.31 occurred as the MACD indicator began moving up from the zero line, confirming a good entry point to buy the dollar. As a result, the pair rose toward the target level 156.13.

The yen plunged, and the dollar rallied after the US Federal Reserve raised the policy rate by 25 basis points. Kevin Warsh also said he intends to tighten further as the situation requires. The Fed raised the median year-end rate forecast to 4.125% from 3.75%, and 16 of 18 officials expect at least one more hike this year, for the yen, this set of decisions widens the already significant divergence between the Fed and the much more cautious Bank of Japan. The only restraining factor remains the upcoming BOJ meeting. If the BOJ unexpectedly hikes more aggressively and adopts a firmer tone in response to the Fed's decisive step, the market will reprice a narrowing of policy divergence and USD/JPY would fall. Otherwise, I would not expect an active reversal lower.

For intraday strategy, I will rely mainly on Scenarios No. 1 and No. 2.

Buy Scenarios

Scenario No. 1: I plan to buy USD/JPY today at an entry around 156.30 (the green line on the chart), targeting a rise to 156.76 (the thicker green line). Around 156.76, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35 pip swing from that level). It is best to return to buying the pair on corrections and meaningful pullbacks. Important: before buying, ensure the MACD is above zero and only beginning to rise.

Scenario No. 2: I also plan to buy USD/JPY today in case of two consecutive tests of 155.96 while the MACD is in oversold territory. That would limit the pair's downside and lead to an upward reversal. Expect moves to the opposite levels 156.30 and 156.76.

Sell Scenarios

Scenario No. 1: I plan to sell USD/JPY today only after a break below 155.96 (red line on the chart), which would lead to a quick decline in the pair. The sellers' key target will be 155.54, where I plan to exit shorts and immediately open longs in the opposite direction (expecting a 20–25 pip reversal from that level). Sellers can return at any moment — it only takes a hint from central banks. Important: before selling, ensure the MACD is below zero and only beginning to fall.

Scenario No. 2: I also plan to sell USD/JPY today in case of two consecutive tests of 156.30 while the MACD is in overbought territory. This would limit the pair's upside potential and trigger a reversal down. Expect a decline to the opposite levels of 155.96 and 155.54.

What to Look for on the Chart:

• Thin Green Line – Entry price at which you can buy the trading instrument;
• Thick Green Line – Estimated price where you can set Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin Red Line – Entry price at which you can sell the trading instrument;
• Thick Red Line – Estimated price where you can set Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it's important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to stay out of the market ahead of significant fundamental reports to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not employ money management practices and trade large volumes.

Also, remember that successful trading requires a clear trading plan, similar to the one provided above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for intraday traders.