Analysis of Trades and Trading Recommendations for the Japanese Yen

The 149.80 level test in the afternoon coincided with the MACD indicator starting to move down from the zero line, confirming a valid entry point for selling the dollar. As a result, the pair dropped by more than 80 pips.

However, during today's Asian session, the USD/JPY pair saw a significant rise, restoring balance to the market. The positive services PMI data from Japan did little to support the yen against the dollar. Despite encouraging numbers indicating economic recovery, investors remain cautious given the global economic situation and central bank policies. The Federal Reserve's rate decisions continue to pressure the Japanese currency, making the dollar more attractive to investors. While the Japanese economy shows signs of growth, it still grapples with issues such as low inflation and weak demand.

In the short term, the yen may continue to exhibit high volatility, as many traders likely anticipate a Bank of Japan interest rate hike soon.

Today, I will focus on implementing Scenario #1 and #2.

Buy Scenarios

Scenario #1:

Today, I plan to buy USD/JPY upon reaching the entry point near 150.21 (green line on the chart) with a target of 150.85 (thicker green line on the chart). At 150.85, I plan to exit the long position and open a short position in the opposite direction (targeting a movement of 30-35 pips in the opposite direction). Considering the downward trend, exercise caution when buying.

Important: Before buying, ensure that the MACD indicator is above the zero line and beginning to rise.

Scenario #2:

I also plan to buy USD/JPY today if there are two consecutive tests of the 149.80 level while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. The expected rise could target the opposing levels of 150.21 and 150.85.

Sell Scenarios

Scenario #1:

I plan to sell USD/JPY only after breaking through the 149.80 level (red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 149.09, where I plan to exit the short position and immediately open a long position in the opposite direction (targeting a movement of 20-25 pips in the opposite direction). Pressure on the pair may persist through the first half of the day.

Important: Before selling, ensure that the MACD indicator is below the zero line and beginning to decline.

Scenario #2:

I also plan to sell USD/JPY today if there are two consecutive tests of the 150.21 level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. The expected decline could target the opposing levels of 149.80 and 149.09.

What's on the Chart:

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
• Thin red line: Entry price for selling the trading instrument.
• Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
• MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.

Important Notes for Beginner Forex Traders:

• Always approach market entry decisions cautiously.
• Avoid trading during major news releases to sidestep volatile price swings.
• If trading during news releases, always set stop-loss orders to minimize losses.
• Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.