02.07.202613:39 Forex Analysis & Reviews: USD/JPY: Trading Tips for Beginner Traders – July 2 (U.S. Session)

Trade Review and Trading Recommendations for the Japanese Yen

The test of the 162.18 price level occurred at a moment when the MACD indicator had just started moving downward from the zero line, confirming a valid entry point for selling the U.S. dollar. As a result, the pair declined toward the 161.60 level.

The apparent currency intervention by the Bank of Japan led to a decline in the U.S. dollar and a sharp rise in the Japanese yen. The sudden and decisive intervention by the central bank, aimed at supporting the weakening national currency, triggered a noticeable move in prices. After a prolonged downtrend in which the U.S. dollar had steadily strengthened against the yen, we are now observing a clear shift in sentiment. The regulator's actions, supported by statements indicating readiness for further measures if necessary, quickly had an impact. However, long-term expectations based on interest rate differentials and capital flows remain unchanged.

In the second half of the day, the situation may change significantly. The first key release is the June U.S. Nonfarm Payrolls report. This indicator is considered one of the main measures of the health of the U.S. economy, covering nearly all sectors except agriculture. At the same time, the U.S. unemployment rate will also be released, which is equally important. A decline in unemployment is generally seen as a positive signal and may lead to renewed buying of the U.S. dollar against the yen.

The final but no less important component of the upcoming data is the change in average hourly earnings. This indicator provides insight into inflation trends and household purchasing power. Faster wage growth may increase concerns about inflation, pushing the Federal Reserve toward a tighter monetary policy stance. Conversely, slower wage growth or stagnation may indicate weaker consumer demand and potential business challenges, which the U.S. aims to avoid.

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

Buy Signal

Scenario No. 1: I plan to buy USD/JPY if the entry point at 161.61 (green line on the chart) is reached, targeting a move toward 162.18 (thick green line on the chart). At 162.18, I will exit long positions and consider opening short positions in the opposite direction, targeting a 30–35 point reversal. The potential for further upside today exists, but remains limited. Important: Before buying, ensure that the MACD is above the zero line and has just started rising from it.

Scenario No. 2: I also plan to buy USD/JPY if there are two consecutive tests of 161.30, while the MACD is in oversold territory. This would limit downward potential and trigger a bullish reversal. In this case, the expected upward targets are 161.61 and 162.18.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY after a breakdown below 161.30 (red line on the chart), which would trigger a sharp decline. The key target for sellers is 160.50, where I will exit short positions and consider opening long positions in the opposite direction, targeting a 20–25 point rebound. Selling pressure may return today in the event of central bank intervention. Important: Before selling, ensure that the MACD is below the zero line and has just started declining from it.

Scenario No. 2: I also plan to sell USD/JPY if there are two consecutive tests of 161.61, while the MACD is in overbought territory. This would limit upward potential and trigger a bearish reversal. In this case, the expected downward targets are 161.30 and 160.50.

Chart Guide

• Thin green line – Entry price for buy trades
• Thick green line – Suggested Take Profit level or area to secure profits, as further gains above this level are unlikely
• Thin red line – Entry price for sell trades
• Thick red line – Suggested Take Profit level or area to secure profits, as further declines below this level are unlikely
• MACD indicator – Use overbought and oversold zones when entering trades

Important: Beginner Forex traders should be very cautious when entering the market. Before major fundamental releases, it is best to stay out of the market to avoid sharp volatility. If you trade during news events, always use stop-loss orders to minimize losses. Without stop-loss protection, you may quickly lose your entire deposit, especially if you do not use proper risk management and trade large volumes.

Remember that successful trading requires a clear trading plan, such as the one outlined above. Spontaneous trading decisions based on current market conditions are generally a losing strategy for intraday traders.