The price test at 158.44 coincided with the moment when the MACD indicator was beginning to move downward from the zero mark, confirming the correct entry point for selling the dollar. As a result, the pair only declined by 15 pips.
Strong reports from the American economy yesterday propelled the dollar upward. The manufacturing index from the Philadelphia Fed rose to 47.4 points from 41.4, while its employment component reached a high since April 2022, and initial jobless claims decreased to 206,000. Strong reports reinforced expectations of a hawkish stance from the Federal Reserve and boosted U.S. Treasury yields, thereby supporting the dollar. For the yen, the strengthening dollar resulted in pressure, as it widened the gap between the Fed, where arguments for tightening are growing louder, and the much more cautious Bank of Japan.
Today, the pair's rise continued, and it is worth recalling the intervention factor, as the BOJ has already entered the market to support the national currency amid its sharp depreciation. Therefore, an excessively rapid rise in USD/JPY amid a strengthening dollar could lead Japanese authorities to consider a similar step again, and the market will closely monitor the pace of the pair's movement.
As for the intraday strategy, I will rely more on implementing scenarios No. 1 and No. 2.
Scenario No. 1: Today, I plan to buy USD/JPY at the entry point around 159.04 (green line on the chart), with a target for growth to 159.45 (the thicker green line on the chart). Around 159.45, I plan to exit long positions and open short positions in the opposite direction (expecting a 30-35-pip move back from the level). It is best to return to buying the pair during corrections and significant pullbacks of USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario No. 2: I also plan to buy USD/JPY today in the event of two consecutive tests of the price at 158.78, when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. One can expect growth to the opposite levels of 159.04 and 159.45.
Scenario No. 1: I plan to sell USD/JPY today only after it breaks the level of 158.78 (red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be 158.47, where I plan to exit shorts and open longs in the opposite direction (expecting a move of 20-25 pips back from the level). Sellers will return at any moment; they need any hint from the central bank. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario No. 2: I also plan to sell USD/JPY today in the event of two consecutive tests of the price at 159.04, when the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a downward market reversal. One can expect a decline to the opposite levels of 158.78 and 158.47.
Important: Beginner forex traders need to make entry decisions very cautiously. Before key fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not practice money management and trade large volumes.
And remember, successful trading requires a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.
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