05.01.202614:52 Forex Analysis & Reviews: USD/JPY: Tips for Beginner Traders on January 5th (U.S. Session)

Trade Breakdown and Tips for Trading the Japanese Yen

The test of the 156.93 price level occurred when the MACD indicator had already moved well below the zero line, which limited the pair's downward potential. For this reason, I did not sell the dollar.

In the second half of the day, the U.S. ISM Manufacturing PMI is due to be released. A negative ISM report may indicate a slowdown in U.S. economic growth, which could potentially put pressure on the dollar. However, whether this would lead to a significant strengthening of the yen is a difficult question. Even today's interview with Ueda and his statements that interest rates will continue to rise failed to produce the desired effect and did not lead to yen appreciation. I believe that only a report from ISM that is significantly worse than forecasts could trigger a wave of selling in the U.S. currency, as market participants would seek to shift assets into safer instruments or currencies perceived as more stable.

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

Buy Signal

Scenario No. 1: I plan to buy USD/JPY today when the entry point around 156.93 is reached (the green line on the chart), with a target of growth toward the 157.40 level (the thicker green line on the chart). Around 157.40, I will exit long positions and open short positions in the opposite direction (expecting a move of 30–35 points in the opposite direction from that level). A rise in the pair can be expected in continuation of the trend.Important! Before buying, make sure 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 today in the event of two consecutive tests of the 156.65 price level while the MACD indicator is in oversold territory. This will limit the pair's downward potential and lead to a bullish market reversal. A rise toward the opposite levels of 156.93 and 157.40 can be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY today after a breakout below the 156.65 level (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be the 156.35 level, where I will exit short positions and also immediately open long positions in the opposite direction (expecting a 20–25 point move in the opposite direction from that level). Pressure on the pair may return today in the event of weak U.S. data.Important! Before selling, make sure 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 today in the event of two consecutive tests of the 156.93 price level while the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a bearish market reversal. A decline toward the opposite levels of 156.65 and 156.35 can be expected.

What's on the Chart:

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

Important. Beginner Forex traders should be extremely cautious when making market entry decisions. Ahead of major fundamental reports, it is best to stay out of the market 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 that successful trading requires a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.