26.02.202613:33 Forex Analysis & Reviews: USD/JPY: Tips for Beginner Traders on February 26th (U.S. Session)

Trade Analysis and Tips for Trading the Japanese Yen

The test of the 156.04 level occurred when the MACD indicator was just beginning to move upward from the zero line, confirming a proper entry point for buying the dollar. As a result, the pair rose by 15 points.

It appears the market has calmed somewhat after Hajime Takata, the most hawkish member of the Bank of Japan's Board, called for a key interest rate hike earlier today, which provided significant support to the yen. In the absence of new signals from the Bank of Japan, similar to yesterday's situation, pressure on the yen may quickly return by the start of the U.S. session.

U.S. labor market data may contribute to this. The figures on unemployment benefit claims are an important indicator of the condition and dynamics of the U.S. workforce. A decline in jobless claims would signal continued resilience in the labor market, leading to growth in the USD/JPY pair. At the same time, a significant event will be the public speech of FOMC member Michelle Bowman. If Bowman expresses caution regarding prospects for rate cuts, this may be interpreted as the Fed's willingness to maintain its current policy for a longer period, which could trigger new dollar buying against the Japanese yen.

As for the intraday strategy, I will rely more on implementing Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy USD/JPY upon reaching the entry point around 156.19 (green line on the chart), with a target of 156.51 (thicker green line on the chart). Around 156.51, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point move in the opposite direction from that level). Growth in the pair today can be expected after a hawkish tone from the Fed.Important: Before buying, make sure that 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 in the case of two consecutive tests of the 155.93 level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 156.19 and 156.51 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell USD/JPY after a breakout below the 155.93 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be 155.46, where I plan to exit short positions and 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 will return in the case of weak reports.Important: Before selling, make sure that 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 in the case of two consecutive tests of the 156.19 level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 155.93 and 155.46 can be expected.

What's on the Chart:

• Thin green line – entry price at which you can buy the trading instrument;
• Thick green line – estimated level where you can place Take Profit orders or manually lock in profits, as further growth above this level is unlikely;
• Thin red line – entry price at which you can sell the trading instrument;
• Thick red line – estimated level where you can place Take Profit orders or manually lock in profits, 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 very cautious when making market entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can very quickly lose your entire deposit, especially if you do not use proper money management and trade large volumes.

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