Trade review and tips for trading the yen

Price tested 157.97 as the MACD indicator began moving up from the zero line, confirming a valid entry point to buy the dollar. However, the pair only moved up about 10 pips and stalled.

The yen is in waiting mode for US data, as no major events remain in the second half of the day and the market sees no strong reasons to buy the dollar. The dollar lost support after Federal Reserve chair Kevin Warsh did not clearly signal more hikes or hint at an imminent pause. Attention now shifts to US industrial data. The consensus for September industrial production is +0.4% month-on-month after 0.0% previously, and capacity utilization is expected at 76.5% versus 76.3% prior. Manufacturing output previously fell 0.3%. Industrial production shows what factories, mines, and utilities produced, while capacity utilization indicates what share of capacity is used. If prints come close to forecasts, the dollar is unlikely to get a strong boost, and risk-asset upside will probably continue.

Earlier, the market will see September import-price data — an early inflation signal. The monthly forecast is +0.6% (previous +0.7%); the year-on-year prior reading was 7.0%. After that, the monthly US budget execution report for September is due. The market will note a big difference: a deficit of $34.7bn is expected vs. $166.8bn previously. A larger deficit means the Treasury needs to borrow more, which can pressure bond yields. Recently falling yields have weighed on the dollar, so the yen may get a chance to strengthen by the end of the week.

For intraday strategy, I will mainly rely on Scenarios 1 and 2.

Buy signal

Scenario 1: Buy USD/JPY today near 157.97 (green line on the chart), targeting 158.33 (thicker green line). I will exit long positions at 158.33 and open short positions there, aiming for a 30–35 pip retracement. Expect limited upside potential today. Important: before buying, ensure MACD is above zero and only beginning to rise.

Scenario 2: Also consider buying if price tests 157.81 twice while MACD is in the oversold area. That would limit downside potential and trigger a reversal higher. Expect moves to 157.97 and 158.33.

Sell signal

Scenario 1: Plan to sell USD/JPY after a break below 157.81 (red line). That should lead to a rapid decline. Sellers' key target is 157.54, where I will exit shorts and immediately open longs (aiming for a 20–25 pip reversal). Pressure on the pair would return if the central bank intervenes. Important: before selling, ensure MACD is below zero and only beginning to fall.

Scenario 2: Also consider selling if price tests 157.97 twice while MACD is in the overbought area. That would limit upside potential and trigger a reversal downward. Expect declines toward 157.81 and 157.54.

What's on the chart:

• Thin green line — entry price at which you can buy the instrument.
• Thick green line — suggested Take-Profit area or a level where you may choose to lock in gains, because further upside above that level is unlikely.
• Thin red line — entry price at which you can sell the instrument.
• Thick red line — suggested Take-Profit area or a level where you may choose to lock in gains, because further downside below that level is unlikely.
• MACD indicator — when entering the market, watch for overbought and oversold zones.

Important. Beginner Forex traders must be very cautious when deciding to enter the market. It is best to stay out of the market before major fundamental releases to avoid getting caught in sharp price moves. If you trade during news releases, always place stop orders to limit losses. Without stop orders,, 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 like the one shown above. Spontaneous trading decisions based solely on current market noise are a losing strategy for intraday traders.