Relevance up to 02:00 2026-05-26 UTC--4
Trade Analysis and Tips for Trading the Japanese Yen
The test of the price at 159.19 coincided with the moment when the MACD indicator was just starting to move upward from the zero mark, confirming the correct entry point for buying the dollar. However, a significant increase in the pair did not materialize.
Following Donald Trump's comments that a peace treaty is nearly reached and is in the finalization stage between Washington, Tehran, and their partners, the U.S. currency declined slightly against the yen. The parties are currently discussing the final details of the deal, with an official announcement expected soon. Market participants, who had recently focused on the scenario of escalating tensions, have gradually begun to close their long positions on the USD/JPY, triggering a slight decline in the pair. However, the gap in central bank policies remains high, so traders are likely to seize the opportunity to build new long positions as a deeper downward correction may occur if a real breakthrough is achieved in reaching a peace agreement between the U.S. and Iran.
As for the intraday strategy, I will rely more on implementing scenarios No. 1 and No. 2.
Buy Scenarios
- Scenario #1: I plan to buy USD/JPY today upon reaching an entry point around 159.00 (the green line on the chart), targeting a move to 159.52 (the thicker green line on the chart). At around 159.52, I plan to exit the long positions and open short positions immediately on the bounce, anticipating a movement of 30-35 pips in the opposite direction from the level. It's best to return to buying the pair during corrections and significant pullbacks in USD/JPY. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning to rise from it.
- Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the price at 158.84 when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. We can expect growth to the opposing levels of 159.00 and 159.52.
Sell Scenarios
- Scenario #1: I plan to sell USD/JPY today only after breaking the level of 158.84 (the red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 158.28 level, where I plan to exit the shorts and buy immediately in the opposite direction, anticipating a 20-25-pip move from that level. Sellers may return at any moment, with just a hint from the central bank. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning to decline from it.
- Scenario #2: I also plan to sell USD/JPY today if the price tests 159.00 twice in a row while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. We can anticipate a decline to the opposing levels of 158.84 and 158.28.
What the Chart Indicates:
- Thin Green Line: Entry price for buying the trading instrument;
- Thick Green Line: Estimated price where take profit can be set or profits can be locked in, as further growth above this level is unlikely;
- Thin Red Line: Entry price for selling the trading instrument;
- Thick Red Line: Estimated price where take profit can be set or profits can be locked in, as further decline below this level is unlikely;
- MACD Indicator: When entering the market, it's important to consider the overbought and oversold zones.
Important Note:
Novice Forex traders must be very cautious when making market entry decisions. It is best to stay out of the market before important fundamental reports are released to avoid sharp 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 use money management and trade large volumes.
Remember that successful trading requires a clear trading plan, similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.
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