27.05.202613:17 Forex Analysis & Reviews: USD/JPY: Tips for Beginner Traders on May 27th (U.S. Session)

Review of Trades and Trading Tips for the Japanese Yen

The test of the 159.38 price level occurred 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 U.S. dollar.

In the second half of the day, all attention in financial markets will be focused on the release of the Richmond Fed Manufacturing Index. The results of this survey could significantly affect the short-term dynamics of the dollar against the yen. Alongside the macroeconomic data, market participants will closely monitor statements from two Federal Open Market Committee members — Lorie K. Logan and Lisa D. Cook. Both are known for their hawkish assessments of inflation, so confirmation of their stance could lead to further growth in USD/JPY. Nevertheless, despite the significance of the above-mentioned events, the geopolitical situation in the Middle East will continue to play a dominant role in global markets. Ongoing tensions in the region, driven by current events, are having a noticeable impact on commodity markets and raising concerns about the sustainability of global economic growth, which directly affects the Japanese economy and the yen negatively.

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 upon reaching the entry point around 159.43 (green line on the chart), with a target at 159.64 (the thicker green line on the chart). Around 159.64, I plan to exit long positions and open short positions in the opposite direction (expecting a movement of 30–35 points in the opposite direction from the level). The pair may continue to rise today on the back of negative news regarding the agreement and strong U.S. economic data.

Important! Before buying, make sure that the MACD indicator is above the zero line and is only beginning to rise from it.

Scenario No. 2

I also plan to buy USD/JPY today in the event of two consecutive tests of the 159.30 price level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 159.43 and 159.64 can then be expected.

Sell Signal

Scenario No. 1

I plan to sell USD/JPY today after the 159.30 level is updated (red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 159.09 level, where I plan to exit short positions and immediately open long positions in the opposite direction (expecting a movement of 20–25 points in the opposite direction from the level). Pressure on the pair will return today in the event of weak economic reports.

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

Scenario No. 2

I also plan to sell USD/JPY today in the event of two consecutive tests of the 159.43 price level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 159.30 and 159.09 can then be expected.

What Is Shown on the Chart

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated price where Take Profit orders can be placed or profits can be fixed manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated price where Take Profit orders can be placed or profits can be fixed manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to follow overbought and oversold zones.

Important

Beginner Forex traders should make market entry decisions very carefully. Before the release of major fundamental reports, it is best to stay out of the market in order to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

And remember, successful trading requires a clear trading plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.