Trade Analysis and Recommendations for Trading the Japanese Yen

The 156.03 price test occurred when the MACD indicator was just beginning to move above the zero mark, confirming a valid entry point for buying the dollar as part of a correction. As a result, the dollar rose by 40 points.

Positive data on changes in machinery and equipment orders in Japan helped the yen recover against the dollar earlier in the day. However, before Trump's inauguration, increased pressure on risk assets allowed USD/JPY buyers to reclaim some positions. These fluctuations in the yen's exchange rate underscore the fragility of the currency market, which remains influenced by global economic factors. An increase in machinery and equipment orders typically indicates confidence in a country's economy. However, political uncertainty and volatility linked to Trump's upcoming inauguration have added complications.

Investors are revising strategies, moving away from riskier assets toward more stable and defensive instruments, affecting demand for the yen as a safe-haven currency. The Japanese economy, not isolated from global shifts, remains vulnerable to external factors, increasing the likelihood of further fluctuations. The situation is further complicated by the absence of significant U.S. economic data today. Likely, statements from Trump's new administration will dictate market direction.

Regarding intraday strategy, I will primarily rely on the execution of Scenario #1 and Scenario #2 in continuation of the ongoing downward trend.

Buy Signal

Scenario #1:

Today, I plan to buy USD/JPY at 156.64 (green line on the chart), targeting growth toward 157.23 (thicker green line on the chart). At 157.23, I will exit the market and simultaneously open short positions, aiming for a 30–35 point movement in the opposite direction. An upward movement in the pair may depend on new statements from Trump.Important! Before buying, ensure that the MACD indicator is above the zero line and just beginning to rise.

Scenario #2:

I also plan to buy USD/JPY if the price tests 156.16 twice, with the MACD indicator in the oversold zone. This will limit the pair's downward potential and trigger a market reversal upward. A rise toward the opposite levels of 156.64 and 157.23 can be expected.

Sell Signal

Scenario #1:

I plan to sell USD/JPY after the price breaks below 156.16 (red line on the chart), leading to a quick decline in the pair. Sellers' main target will be 155.52, where I will exit the market and simultaneously open long positions, aiming for a 20–25 point movement in the opposite direction. Pressure on the pair may persist within the ongoing downtrend.Important! Before selling, ensure that the MACD indicator is below the zero line and just beginning to fall.

Scenario #2:

I also plan to sell USD/JPY if the price tests 156.64 twice, with the MACD indicator in the overbought zone. This will limit the pair's upward potential and trigger a market reversal downward. A decline toward the opposite levels of 156.16 and 155.52 can be expected.

Chart Details

• Thin Green Line: Entry price for buying the trading instrument.
• Thick Green Line: Estimated price to set Take Profit or manually secure profits, as further growth above this level is unlikely.
• Thin Red Line: Entry price for selling the trading instrument.
• Thick Red Line: Estimated price to set Take Profit or manually secure profits, as further decline below this level is unlikely.
• MACD Indicator: Use overbought and oversold zones for market entries.

Important Notes for Beginner Forex Traders

Beginner traders must exercise extreme caution when entering the market. It is best to stay out of the market before the release of significant fundamental reports to avoid abrupt exchange rate fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Trading without stop orders can quickly deplete your account, especially if you trade large volumes without applying proper money management strategies.

Remember, successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.