25.08.202616:02 Forex Analysis & Reviews: USD/JPY: Trading Tips for Beginner Traders – August 25 (U.S. Session)

Review of Trades and Trading Tips for the Japanese Yen

The test of 159.43 occurred when the MACD indicator had already risen significantly above the zero line, which limited the pair's upward potential. The second test of 159.43, while the MACD was in the overbought zone, led to the implementation of Scenario #2 for selling the dollar, resulting in a 20-point decline in the pair.

In the second half of the day, the market is awaiting a batch of U.S. economic data, including the Consumer Confidence Index, new home sales, and the Richmond Fed Manufacturing Index. These indicators provide additional insight into the state of the economy, and strong figures could lead to a more substantial rise in the dollar due to increased expectations for the Fed's interest rate and higher U.S. Treasury yields. In the event of strong data, the Japanese yen risks coming under pressure, as a stronger dollar would widen the divergence between the Fed's approach and the much more cautious stance of the Bank of Japan. USD/JPY could move higher, while a weak result would allow the yen to recover some of its losses.

As for the intraday strategy, I will rely primarily 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 159.43 (the green line on the chart), with a target of rising to 159.72 (the thicker green line on the chart). Around 159.72, I will close the long position and open a short position, targeting a move of 30–35 points in the opposite direction from the level. A rise in the pair can be expected today, but the outlook is rather uncertain. 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 159.25 twice consecutively while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and lead to a reversal higher. A rise toward the opposite levels of 159.43 and 159.72 can be expected.

Sell Signal

Scenario #1: Today, I plan to sell USD/JPY after the price breaks below 159.25 (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 158.97, where I will close the short position and immediately open a long position, targeting a move of 20–25 points in the opposite direction from the level. Pressure on the pair is expected to 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 159.43 twice consecutively while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and lead to a reversal lower. A decline toward the opposite levels of 159.25 and 158.97 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 estimated price at which Take Profit orders can be placed or profits can be taken manually, as further gains above this level are unlikely;
• Thin red line — the entry price at which the trading instrument can be sold;
• Thick red line — the estimated price at which Take Profit orders can be placed or profits can be taken manually, as further declines below this level are unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold zones into account.

Important. Beginner Forex traders should exercise extreme caution when making market-entry decisions. 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 a news release, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit 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.