19.08.202613:00 Forex Analysis & Reviews: USD/JPY: Trading Tips for Beginner Traders – August 19 (U.S. Session)

Trade Review and Trading Tips for the Japanese Yen

The 159.22 price test occurred when the MACD indicator had already moved significantly below the zero line, which limited the dollar's downward potential. For this reason, I did not sell.

In the second half of the day, the main event will be the release of the minutes of the latest Fed meeting, at which three committee members called for a rate hike. The document will reveal details of that discussion, and the market will look for confirmation of how serious the regulator's hawkish bias is. A hawkish tone in the minutes could push U.S. Treasury yields higher and strengthen the dollar as expectations of tighter monetary policy increase, while softer wording would, conversely, weaken the dollar. For the yen, a hawkish outcome carries a risk of further weakness, as it widens the policy gap between the Fed, where calls for a rate hike have already emerged, and the much more cautious Bank of Japan. This difference is currently weighing on the Japanese currency, and confirmation of a hawkish stance in the minutes could push USD/JPY higher.

As for the intraday strategy, I will focus more on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy USD/JPY when the entry point is reached around 159.18 (the green line on the chart), with a target of 159.48 (the thicker green line on the chart). Around 159.48, I will close the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. The pair may rise today, but the upward potential is rather limited. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario #2: Today, I also plan to buy USD/JPY if the price tests 158.91 twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal higher. A rise toward the opposite levels of 159.18 and 159.48 can be expected.

Sell Signal

Scenario #1: Today, I plan to sell USD/JPY after the 158.91 level is broken (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 158.60, where I will close the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Downward pressure on the pair will return 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 from it.

Scenario #2: Today, I also plan to sell USD/JPY if the price tests 159.18 twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal lower. A decline toward the opposite levels of 158.91 and 158.60 can be expected.

What the Chart Shows

• Thin green line — the entry price at which the trading instrument can be bought.
• Thick green line — the expected price level at which Take Profit can be set or profits can be taken 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 expected price level at which Take Profit can be set or profits can be taken manually, as further decline below this level is unlikely.
• MACD indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important. Beginner Forex traders should be extremely cautious when making decisions about entering the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during the release of economic data, always place stop orders to minimize losses. Without stop orders, you can lose your entire account balance very quickly, especially if you do not use proper money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making trading decisions spontaneously based on the current market situation is fundamentally a losing strategy for an intraday trader.