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The price test at 157.80 coincided with the moment when the MACD indicator began to move downward from the zero mark, confirming the correct entry point to sell the dollar. As a result, the pair decreased by more than 40 pips.
Yesterday, the dollar was left without support as a batch of American data came in mixed and offered it no backing. The labor market in June was in equilibrium, with JOLTs indicators showing little change. The manufacturing sector provided a similarly ambiguous signal, with new orders decreasing by 0.3%. The lack of clear bias in the data prevented U.S. Treasury yields from rising, depriving the dollar of momentum. The Japanese yen received support amid the dollar's weakness. Modest yields in the U.S. narrowed the rate gap with Japan and made the yen more attractive, pushing USD/JPY downward. This decline in the pair shifted the focus away from the theme of currency intervention, which the central bank actively conducted at the end of last week in coordination with the U.S. Federal Reserve. However, any significant decline in the pair will be seen as a buying opportunity, as the real reasons that pushed the yen down all this time have not disappeared.
Regarding intraday strategy, I will rely more on implementing Scenarios #1 and #2.
Scenario #1: I plan to buy USD/JPY today upon reaching an entry point around 157.87 (green line on the chart) with a target rise to 158.22 (thicker green line on the chart). At the level of 158.22, I intend to exit the long positions and open short positions in the opposite direction (expecting a movement of 30-35 pips in the opposite direction from this 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 there.
Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of 157.61, with the MACD indicator in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth can be expected toward the opposite levels of 157.87 and 158.22.
Scenario #1: I plan to sell USD/JPY today only after a breakout below 157.61 (red line on the chart), which will trigger a quick decline in the pair. The key target for sellers will be 157.29, where I plan to exit the short position and immediately buy in the opposite direction (expecting a move of 20-25 pips in the opposite direction from this level). Sellers will return at any moment; all that is needed is 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 there.
Scenario #2: I also plan to sell USD/JPY today if there are two consecutive tests of 157.87 while 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 can be expected toward the opposite levels of 157.61 and 157.29.
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.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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