06.02.202616:14 Forex Analysis & Reviews: USD/JPY: Tips for Beginner Traders on February 6th (U.S. Session)

Trade breakdown and trading tips for the Japanese yen

The test of the 157.02 price level occurred at a moment when the MACD indicator had already moved significantly above the zero line, which, in my view, limited the dollar's upward potential. For this reason, I did not buy the dollar.

In the second half of the day, market participants' attention will be focused on the release of a number of important macroeconomic indicators. Particular importance is attached to the University of Michigan Consumer Sentiment Index. High readings of this index may indicate favorable household expectations regarding the future, which in turn could support the dollar. In addition to the sentiment index, traders will closely monitor inflation expectations data. If these exceed forecasts, this would also trigger dollar buying against the Japanese yen. In addition, a speech by FOMC member Philip N. Jefferson is scheduled for today. His comments on the current state of the economy and future directions of monetary policy will be carefully analyzed by market participants. Any hints at a possible change in the Fed's stance on interest rates or other aspects of monetary policy could cause noticeable volatility in financial markets.

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

Buy signal

Scenario No. 1: Today, I plan to buy USD/JPY upon reaching an entry point around 157.15 (green line on the chart), with a growth target at the 157.50 level (the thicker green line on the chart). Around 157.50, I will exit long positions and open sell positions in the opposite direction (aiming for a 30–35-point move in the opposite direction from that level). An increase in the pair today can be expected after strong U.S. data.Important: Before buying, make sure the MACD indicator is above the zero line 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 156.86 level while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 157.15 and 157.50 can be expected.

Sell signal

Scenario No. 1: I plan to sell USD/JPY today after an update (break) of the 156.86 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be the 156.47 level, where I will exit short positions and also immediately open buy positions in the opposite direction (aiming for a 20–25-point move in the opposite direction from that level). Pressure on the pair will return in the event of weak data.Important: Before selling, make sure the MACD indicator is below the zero line and is just starting to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today in the case of two consecutive tests of the 157.15 level 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 toward the opposite levels of 156.86 and 156.47 can be expected.

What's on the chart

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated price where Take Profit orders can be placed or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated price where Take Profit orders can be placed or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to focus on overbought and oversold zones.

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

And 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 an inherently losing strategy for an intraday trader.