12.08.202608:41 Forex Analysis & Reviews: USDJPY: Simple Trading Tips for Beginner Traders on August 12. Analysis of Yesterday's Forex Trades

Trade Analysis and Tips for Trading the Japanese Yen

The price test at 159.19 occurred when the MACD indicator had moved significantly below the zero mark, limiting the pair's downside potential. For this reason, I did not sell the dollar.

The Japanese yen found itself at the center of a rare example of US–Japan alignment, which demonstrated unity in the desire to strengthen the national currency. Nevertheless, underlying these efforts is a fundamental disagreement between Scott Bessent and Sanae Takaichi over the Bank of Japan's course, and this disagreement risks undermining the effects achieved. The dispute concerns a key question — the pace of policy tightening — and its outcome largely determines whether the yen's weakness can be reversed. The parties' positions diverge noticeably. Takaichi fears too rapid and excessive rate increases, while Bessent believes that monetary tightening is the decisive tool in combating the yen's weakness. For the currency market, this is a pivotal point, because a higher rate would narrow the yield gap with the US and support the yen, whereas central bank indecision leaves it vulnerable. Until this dispute is resolved, uncertainty remains over the prospects for the Japanese currency.

Regarding the intraday strategy, I will rely more on implementing Scenarios #1 and #2.

Buying Scenarios

Scenario #1: I plan to buy USD/JPY today when the entry point reaches around 159.49 (green line on the chart) with a target of rising to 159.81 (thicker green line on the chart). Around 159.81, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35 pips move in the opposite direction from the level). It is best to return to buying the pair on corrections and significant drawdowns of USD/JPY. Important! Before buying, make sure the MACD indicator is above the zero mark and is just beginning its rise from it.

Scenario #2: I also plan to buy USD/JPY today in the event of two consecutive tests of the price at 159.28, with the MACD indicator in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. One can expect growth toward the opposite levels 159.49 and 159.81.

Selling Scenarios

Scenario #1: I plan to sell USD/JPY today only after the level 159.28 is updated (red line on the chart), which will lead to a rapid decline of the pair. The key target for sellers will be 158.93, where I intend to exit shorts and immediately open longs in the opposite direction (expecting a 20–25-pip move in the opposite direction from the level). Sellers will return at any moment; only a hint from the central bank is needed. Important! Before selling, make sure the MACD indicator is below the zero mark and is just beginning its decline from it.

Scenario #2: I also plan to sell USD/JPY today in the event of two consecutive tests of the price at 159.49, when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. One can expect a decline toward the opposite levels of 159.28 and 158.93.

What the Chart Shows:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price where take profit can be set, or profit can be realized, 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 profit can be realized, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by overbought and oversold zones.

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.