Trade review and trading tips for the Japanese yen

The price test at 153.90 occurred as the MACD indicator began moving down from the zero line, confirming a correct entry point to sell the dollar. As a result, the pair fell toward the 153.40 area.

However, today the yen has begun to weaken against the dollar again, mainly because currency interventions have ceased. While the US and the Bank of Japan actively intervened in the market, the yen held an advantage, but once that support disappeared, pressure returned. In effect, one of the yen's key supports was removed, and dollar buyers immediately took advantage, sending USD/JPY higher.

The fundamental backdrop in Japan itself remains mixed. The revised industrial report for July showed manufacturing fell 0.2% month-on-month, although it rose 3.9% year-on-year; shipments increased 2.1%, and the operating efficiency ratio rose 0.5%. The picture is rather cautiously positive, but it was not enough to reverse the bias against the yen after interventions stopped.

In my view, everything now depends on a pair of central-bank meetings: the market still confidently expects a BoJ rate normalization this week. Policy normalization in Japan remains the main support for the yen, but without intervention support it has become much more vulnerable, and for now the initiative has passed to the dollar. The Federal Reserve meeting will not be an easy gift for traders either, since it is far from clear whether the committee will hike rates.

As for the intraday strategy, I will rely mostly on scenarios No. 1 and No. 2.

Buy scenarios

Scenario No. 1: I plan to buy USD/JPY today if the price reaches the entry point around 154.19 (the green line on the chart), targeting a rise to 154.60 (the thicker green line on the chart). Around 154.60, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35 pip move from that level). It is best to return to buying the pair on corrections and significant USD/JPY pullbacks. Important: before buying, make sure the MACD indicator is above the zero line and only beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in case of two consecutive tests of 153.96 while the MACD is in oversold territory. This will limit the pair's downside potential and lead to an upward reversal. One can expect moves to the opposite levels 154.19 and 154.60.

Sell scenarios

Scenario No. 1: I plan to sell USD/JPY today only after a break of 153.96 (red line on the chart), which would lead to a quick decline in the pair. The sellers' key target will be 153.47, 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 any hint from the central banks. Important: before selling, make sure the MACD indicator is below the zero line and only beginning to fall from it.

Scenario No. 2: I also plan to sell USD/JPY today in case of two consecutive tests of 154.19 while the MACD is in overbought territory. This will limit the pair's upside potential and trigger a downward reversal. Expect a decline to the opposite levels of 153.96 and 153.47.

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.