22.09.202613:12 Forex Analysis & Reviews: USD/JPY: Trading Tips for Beginner Traders – September 22 (U.S. Session)

Trade Analysis and Trading Tips for the Japanese Yen

The test of 157.38 occurred when the MACD indicator had just started moving down from the zero line, confirming that it was an appropriate entry point for selling the U.S. dollar. As a result, the pair fell sharply toward the target level of 156.92.

Next, we will have the Richmond Fed Manufacturing Index, which will be released in the second half of the day, but it will most likely be overshadowed by a much more significant event: a series of speeches by FOMC members John Williams, Tom Barkin, and Philip Jefferson. Following the unanimous rate hike and the significant upward revision of forecasts, the market will analyze every word from these speakers in search of confirmation of the regulator's continued commitment to further action. If their rhetoric is consistent with Waller's stance, the dollar may strengthen its gains from the previous day without significant resistance. For the yen, further dollar strength in this context only increases the already significant contrast with the much more gradual and cautious stance of the Bank of Japan.

I would remind you that last week, on September 18, the Bank of Japan raised its interest rate by 25 basis points to 1.25%, its highest level since 1995. This was the third rate increase in the current policy normalization cycle, which began in March 2024. However, the vote was split 7–2, with board members Toichiro Asada and Ayano Sato voting against the increase. It is also worth noting that the interval between this increase and the previous one in June was reduced to three months from six previously, meaning that the central bank is accelerating the pace of tightening. However, for the yen to strengthen, new interventions by the regulator may apparently be necessary.

As for the intraday strategy, I will focus more on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy USD/JPY today when the entry point around 157.15 is reached (the green line on the chart), with a target of 157.51 (the thicker green line on the chart). Around 157.51, I will close the long position and open a short position, targeting a move of 30–35 points in the opposite direction from the level. An upward move in the pair can be expected today, but the upward potential appears limited. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today if the price tests 156.82 twice consecutively while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal to the upside. A rise toward the opposite levels of 157.15 and 157.51 can be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY today after the price breaks below 156.82 (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 156.46, where I will close the short position and immediately open a long position, targeting a move of 20–25 points in the opposite direction from the level. Downward pressure on the pair may return today if the central bank intervenes. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today if the price tests 157.15 twice consecutively while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal to the downside. A decline toward the opposite levels of 156.82 and 156.46 can be expected.

What Is Shown on the Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the expected price at which Take Profit orders can be placed or profits can be closed manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the expected price at which Take Profit orders can be placed or profits can be closed manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold areas into account.

Important. Beginner Forex traders need to be very cautious when making decisions about entering the market. Before the release of important fundamental reports, it is best to remain out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.