Trade analysis and trading advice for the Japanese yen

The test of the 158.34 level occurred when the MACD indicator had just begun moving downward from the zero mark, confirming a correct entry point for selling the dollar. However, the pair did not experience a significant decline afterward.

The escalation of tensions in the Middle East will continue to be the main driver of movements in the USD/JPY pair. It should be understood that the conflict is not solely an American problem, and its development will negatively affect other countries—especially those heavily dependent on energy imports.

In the short term, increased demand for the U.S. dollar may be driven by its status as the world's reserve currency and its high liquidity. However, the long-term consequences should not be ignored. If the conflict drags on and becomes large-scale—considering it has already lasted more than a week—it could undermine confidence in the dollar as a global reserve asset. This, in turn, could provide some support to the Japanese yen, as was seen last week.

For now, however, in the absence of other important news, fear and investors' search for safe-haven assets will likely continue to benefit the dollar in the current situation.

As for the intraday strategy, I will mainly rely on implementing Scenario No. 1 and Scenario No. 2.

Buy Signal

Scenario No. 1: I plan to buy USD/JPY today when the price reaches the entry point around 158.57 (green line on the chart), with a target of 159.09 (thicker green line on the chart). Around 159.09, I plan to exit buy positions and open sell positions in the opposite direction (expecting a 30–35 point move in the opposite direction). Further growth of the pair today is still possible.

Important: Before buying, make sure the MACD indicator is above the zero line and just beginning to move upward from it.

Scenario No. 2: I also plan to buy USD/JPY today if there are two consecutive tests of the 158.26 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upward. Growth toward the opposite levels of 158.57 and 159.09 can then be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY today after a break of the 158.26 level (red line on the chart), which should lead to a rapid decline of the pair. The key target for sellers will be 157.81, where I plan to exit sell positions and immediately open buy positions in the opposite direction (expecting a 20–25 point rebound). Pressure on the pair is unlikely to return today.

Important: Before selling, make sure the MACD indicator is below the zero line and just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today if there are two consecutive tests of the 158.57 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 158.26 and 157.81 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 level where Take Profit orders can be placed or profits can be taken manually, since 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 level where Take Profit orders can be placed or profits can be locked in manually, since further decline below this level is unlikely.
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important

Beginner Forex traders should be very cautious when making market entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize potential losses. Without stop-loss orders, you can quickly lose your entire deposit, especially if you do not use proper money management and trade with large volumes.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.