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The test of the 161.68 level occurred when the MACD indicator was just beginning to move higher from the zero line, confirming a valid entry point for buying the US dollar. As a result, the pair gained only 12 points.
The US session will be lacking its usual catalysts this afternoon, as neither major economic data nor speeches by Federal Reserve officials are scheduled. In the absence of releases that typically shape interest rate expectations and influence the US dollar, market attention will shift entirely to geopolitical developments—specifically, events in the Middle East and any unexpected statements from Donald Trump.
In this environment, the Japanese yen will be influenced by two key factors. As a safe-haven currency, it could benefit if geopolitical tensions escalate. However, if market conditions remain calm and demand for the US dollar stays strong, USD/JPY is likely to remain elevated due to the interest rate differential. At the same time, the risk of currency intervention remains, as an excessively rapid rise in the pair increases the likelihood that the Bank of Japan could intervene in the foreign exchange market to support the yen.
As for my intraday strategy, I will primarily rely on the execution of Scenario No. 1 and Scenario No. 2.
Scenario No. 1: I plan to buy USD/JPY if the price reaches the 161.87 entry level (the green line on the chart), targeting 162.24 (the thicker green line on the chart). Around 162.24, I intend to close my long positions and consider opening short positions, anticipating a 30–35 point reversal from that level. Further gains in the pair are possible today, although they are likely to be limited.
Important: Before entering a long position, make sure that the MACD indicator is above the zero line and is just beginning to move higher.
Scenario No. 2: I also plan to buy USD/JPY if the price tests 161.69 twice in succession while the MACD indicator is in oversold territory. This would limit the pair's downward potential and could trigger an upward reversal. In this case, a move toward 161.87 and 162.24 may be expected.
Scenario No. 1: I plan to sell USD/JPY after the price breaks below 161.69 (the red line on the chart), which could trigger a rapid decline in the pair. The primary downward target is 161.27, where I intend to close my short positions and immediately consider opening long positions, anticipating a 20–25 point rebound. Selling pressure on the pair is likely to return if the central bank intervenes.
Important: Before entering a short position, make sure that the MACD indicator is below the zero line and is just beginning to move lower.
Scenario No. 2: I also plan to sell USD/JPY if the price tests 161.87 twice in succession while the MACD indicator is in overbought territory. This would limit the pair's upward potential and could trigger a downward reversal. In this case, a decline toward 161.69 and 161.27 may be expected.
Beginner Forex traders should exercise caution when making trading decisions. It is generally advisable to stay out of the market before the release of major fundamental data to avoid sharp price swings. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Without stop-loss orders, you can lose your entire trading account very quickly, especially if you trade large position sizes without proper risk management.
Finally, remember that successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous trading decisions based solely on current market conditions is generally a losing strategy for intraday traders.
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