25.05.202613:29 Forex Analysis & Reviews: USD/JPY: Tips for Beginner Traders on May 25th (U.S. Session)

Trade Review and Tips for Trading the Japanese Yen

The test of the 159.00 level occurred at a time when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential. For this reason, I did not buy the dollar.

It is clear that the market, holding its breath, is on the defensive, seeing no strong reasons for decisive changes. Statements from the Iranian Foreign Ministry, while outlining certain frameworks, did not clarify the prospects for a near-term agreement and did not bring clarity to the situation. This wait-and-see stance, along with the absence of new and meaningful informational impulses, is contributing to USD/JPY remaining within a narrow sideways range.

There is no U.S. economic data scheduled for the second half of the day today, so market participants, deprived of regular macroeconomic indicators, will be forced to rely on diplomatic statements and expert assessments regarding developments in the Middle East. Such dependence on a single, albeit significant, factor may lead to increased volatility with even minor shifts in the information flow related to the Iranian situation.

As for the intraday strategy, I will rely primarily on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy USD/JPY at the entry point around 159.00 (green line on the chart), targeting a rise toward 159.52 (thicker green line on the chart). At around 159.52, I will exit long positions and open short positions in the opposite direction, targeting a 30–35 point move back from the level. A rise in the pair today is possible in the case of negative news regarding the agreement.

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: I also plan to buy USD/JPY if the price tests 158.89 twice consecutively while the MACD indicator is in oversold territory. This would limit the downward potential of the pair and trigger a reversal upward. In this case, a rise toward the opposite levels of 159.00 and 159.52 can be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY after a breakdown below 158.89 (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be 158.28, where I plan to exit short positions and immediately open long positions in the opposite direction, targeting a 20–25 point rebound. Pressure on the pair will return today in the event of a peace agreement.

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

Scenario No. 2: I also plan to sell USD/JPY if the price tests 159.00 twice consecutively while the MACD indicator is in overbought territory. This would limit the pair's upward potential and trigger a reversal downward. In this case, a decline toward 158.89 and 158.28 can be expected.

Chart Notes:

• Thin green line – entry price for buy trades;
• Thick green line – estimated Take Profit level or area for manual profit-taking, as further growth above this level is unlikely;
• Thin red line – entry price for sell trades;
• Thick red line – estimated Take Profit level or area for manual profit-taking, as 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 must be extremely cautious when making trading decisions. It is best to stay out of the market ahead of important fundamental reports to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-losses, you may quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on current market conditions are an inherently losing strategy for intraday traders.