13.01.202613:34 Forex Analysis & Reviews: USD/JPY: Tips for Beginner Traders — January 13th (US Session)

Trade Review and Trading Advice for the Japanese Yen

No tests of the marked levels occurred during the first half of the day.

It appears that the market has already digested the possibility of a dissolution of the Japanese government, while statements from central bank officials helped limit further losses in the Japanese yen during the first half of the session. Market participants are now closely watching the upcoming inflation data. If actual inflation exceeds expectations, it could strengthen the case for a more restrictive interest rate policy in the United States. Conversely, more moderate price growth would give the Federal Reserve greater flexibility to ease its current policy, which could put pressure on the US dollar against the yen.

US new home sales will also be closely monitored, as this indicator is a key gauge of the health of the housing market and overall economic activity. Stable sales figures could point to resilience in the housing sector. A speech by Federal Open Market Committee member Alberto Musalem is unlikely to significantly shift market sentiment in USD/JPY, but it will still be analyzed for clues regarding his view of the current economic situation and interest rate outlook.

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

Buy Signal

Scenario No. 1

I plan to buy USD/JPY today if the price reaches the entry level around 159.03 (green line on the chart), targeting a move toward 159.58 (thicker green line on the chart). Around 159.58, I plan to exit long positions and consider opening short positions in the opposite direction, aiming for a 30–35 point move from that level. Further upside can be expected in line with the prevailing trend.

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

Scenario No. 2

I also plan to buy USD/JPY today if there are two consecutive tests of the 158.75 level while the MACD is in oversold territory. This would limit the pair's downward potential and trigger a reversal to the upside. A move toward the opposite levels of 159.03 and 159.58 can be expected.

Sell Signal

Scenario No. 1

I plan to sell USD/JPY today after a break below the 158.75 level (red line on the chart), which could lead to a sharp decline in the pair. The key downward target for sellers will be 158.20, where I plan to exit short positions and immediately open long positions in the opposite direction, aiming for a 20–25 point rebound. Selling pressure may return today if the Federal Reserve adopts a dovish stance.

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

Scenario No. 2

I also plan to sell USD/JPY today if there are two consecutive tests of the 159.03 level while the MACD is in overbought territory. This would cap the pair's upward potential and trigger a reversal to the downside. A decline toward the opposite levels of 158.75 and 158.20 can be expected.

Chart Explanation

• Thin green line — Entry price for buying the instrument
• Thick green line — Projected take-profit level, where profits may be locked in, as further upside above this level is unlikely
• Thin red line — Entry price for selling the instrument
• Thick red line — Projected take-profit level, where profits may be locked in, as further downside below this level is unlikely
• MACD indicator — When entering trades, it is important to consider overbought and oversold zones

Important Notice for Beginner Traders

Beginner Forex traders should be extremely cautious when making market-entry decisions. Ahead of major fundamental releases, it is best to stay out of the market to avoid sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Without stop-loss protection, you can lose your entire deposit very quickly—especially if you do not apply proper money management and trade large position sizes.

Finally, remember that successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous trading decisions based solely on current market conditions is an inherently losing strategy for intraday traders.