Trade Review and Tips for Trading the Japanese Yen

The test of the 144.26 price level in the first half of the day occurred when the MACD indicator had just started moving up from the zero line, which confirmed a proper entry point for buying the dollar. However, after a 10-point upward move, the bullish momentum faded.

The Empire Manufacturing Index data has limited influence on the currency market and the U.S. dollar, especially in the context of broader macroeconomic trends. While unexpectedly strong data can cause a short-term wave of optimism and support the U.S. currency, the effect usually fades quickly. This is because the Empire Manufacturing Index only reflects the state of the manufacturing sector in one specific region and is not a comprehensive indicator of the health of the entire U.S. economy.

Moreover, geopolitical factors must also be considered. Escalation in the Iran–Israel conflict may lead to a rapid strengthening of the U.S. dollar and a decline in the yen. In times of geopolitical uncertainty, investors traditionally seek safety in the dollar as a reliable haven. This demand pushes the dollar's value higher against other currencies. As for the Japanese yen, conflict escalation may raise doubts about its role as a safe haven. Although the yen has historically been viewed as such, in times of rising military tensions, traders may favor the dollar instead.

Regarding intraday strategy, I will primarily rely on the execution of scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today upon reaching the entry point near 144.26 (green line on the chart) with a target of rising to the 144.84 level (thicker green line). Around 144.84, I plan to exit long positions and open short ones in the opposite direction (expecting a 30–35 point pullback). A strong upward move is possible today due to geopolitical events. Important! Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.

Scenario #2: I also plan to buy USD/JPY if there are two consecutive tests of the 143.97 price level when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and may trigger a reversal upward. A rise toward the opposite levels of 144.26 and 144.84 can be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY today after a break below the 143.97 level (red line on the chart), which will lead to a quick decline in the pair. The key target for sellers will be the 143.50 level, where I will exit short trades and open immediate long positions (expecting a 20–25 point rebound). Downward pressure is unlikely to return today. Important! Before selling, make sure the MACD indicator is below the zero line and just starting to decline from it.

Scenario #2: I also plan to sell USD/JPY in the case of two consecutive tests of the 144.26 price level when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and may trigger a reversal downward. A decline toward the opposite levels of 143.97 and 143.50 can be expected.

Chart Legend:

• Thin green line – entry price for buying the trading instrument
• Thick green line – suggested Take Profit level or manual profit-taking zone, as further growth beyond this level is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – suggested Take Profit level or manual profit-taking zone, as further decline beyond this level is unlikely
• MACD Indicator – when entering the market, it's important to monitor overbought and oversold zones

Important: Beginner Forex traders must exercise great caution when deciding to enter the market. It is best to stay out of the market ahead of key fundamental reports to avoid being caught in sharp price swings. If you choose to trade during news releases, always set stop-loss orders to minimize losses. Without them, you can lose your entire deposit very quickly—especially if you don't use money management and trade large volumes.

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