Trade Review and Trading Advice for the Japanese Yen

The price test at 157.30 in the first half of the day occurred when the MACD indicator had already moved significantly below the zero line, limiting the pair's downward potential. For this reason, the dollar was not sold, and the downward move was missed.

In the second half of the day, US economic data will remain the main driver for USD/JPY. Initial jobless claims are expected to reach 200,000, compared with 199,000 in the previous report. The market recorded exactly the same figure on October 15. This indicator measures the number of people filing for unemployment benefits for the first time and provides an early indication of whether a wave of layoffs has begun in the economy. Analysts expect the Leading Economic Indicators Index for September to decline by 0.2%, following a decrease of 0.1%, while the previous reading stood at 99.5 points. The index combines around ten leading indicators and shows the likely direction of the economy over the coming months. Strong US data would clearly reinforce expectations of tighter Federal Reserve policy.

As for currency intervention, the most recent coordinated actions by Japan and the United States took place on July 31. The market currently estimates the probability of a Bank of Japan rate hike at its October 30 meeting at around 25%. Trade remains a weak spot: the trade deficit for September reached £704.0 billion, compared with a forecast of £260.0 billion and a previous figure of £801.1 billion. If US data are strong, USD/JPY may recover some of its losses. However, the risk of further statements and actions by Japanese authorities is likely to prevent the dollar from extending its gains confidently.

As for the intraday trading strategy, greater emphasis will be placed on implementing Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: USD/JPY can be bought today if the price reaches the entry level around 157.11 (the thin green line on the chart), with a target of 157.68 (the thick green line on the chart). Near 157.68, the long position will be closed and a short position opened, targeting a move of 30–35 points in the opposite direction from that level. Further gains in the pair are possible today, but the upward potential remains limited. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: USD/JPY can also be bought today if the price tests the 156.79 level twice consecutively while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and trigger an upward market reversal. A rise toward the opposite levels of 157.11 and 157.68 can then be expected.

Sell Signal

Scenario No. 1: USD/JPY can be sold today after the price breaks below 156.79 (the red line on the chart), potentially triggering a rapid decline in the pair. The sellers' main target will be 156.18, where the short position will be closed and a long position opened immediately, targeting a move of 20–25 points in the opposite direction from that level. Selling pressure on the pair could return today if the central bank intervenes. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline further.

Scenario No. 2: USD/JPY can also be sold today if the price tests the 157.11 level twice consecutively while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and trigger a downward market reversal. A decline toward the levels of 156.79 and 156.18 can then be expected.

What the Chart Shows

• Thin green line – the entry price at which the trading instrument can be bought.
• Thick green line – the estimated price level at which Take Profit orders can be placed or profits can be closed manually, as further gains above this level are considered unlikely.
• Thin red line – the entry price at which the trading instrument can be sold.
• Thick red line – the estimated price level at which Take Profit orders can be placed or profits can be closed manually, as further declines below this level are considered unlikely.
• MACD indicator – when entering the market, it is important to consider the overbought and oversold zones.

Important. Beginner Forex traders should exercise considerable caution when deciding whether to enter the market. Before the release of major fundamental reports, it is generally best to stay out of the market to avoid exposure to sharp exchange-rate fluctuations. If trading during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, the entire trading account can be depleted very quickly, especially if risk management rules are not followed and large position sizes are used.

Remember that successful trading requires a clear trading plan, such as the example presented above. Making spontaneous trading decisions based on current market conditions is fundamentally a losing strategy for an intraday trader.