26.08.202614:20 Forex Analysis & Reviews: USD/JPY: Trading Tips for Beginner Traders – August 26 (US Session)

Review of Trades and Trading Tips for the Japanese Yen

The price test of 159.16 occurred when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential.

During the second half of the day, the market is awaiting a series of very important US data releases, including the change in second-quarter GDP, the core Personal Consumption Expenditures (PCE) index for July, and personal income and spending data. The day will conclude with a speech by FOMC member Thomas Barkin. The PCE index is particularly important here because it is the Fed's preferred measure of inflation and directly affects interest-rate expectations and US Treasury yields. Strong data could push yields higher and strengthen the dollar, while weak data would reverse the situation. This scenario is directly relevant for the yen, as it is particularly sensitive to Fed policy amid the much more cautious stance of the Bank of Japan. Accelerating inflation and strong economic growth could push USD/JPY higher, widening the divergence between the approaches of the two central banks, while a weak result would allow the Japanese currency to regain some ground.

As for the intraday strategy, I will focus more on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy USD/JPY when the entry point reaches around 159.23 (the green line on the chart), with a target of 159.65 (the thicker green line on the chart). Around 159.65, I will exit the long position and open a short position in the opposite direction, targeting a move of 30–35 points in the opposite direction from the level. A rise in the pair today is possible, but the upward potential is relatively limited. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario #2: I also plan to buy USD/JPY today if the price tests 159.05 twice consecutively while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and trigger a reversal to the upside. A rise toward the opposite levels of 159.23 and 159.65 can be expected.

Sell Signal

Scenario #1: Today, I plan to sell USD/JPY after the price breaks below 159.05 (the red line on the chart), which should lead to a rapid decline in the pair. The key target for sellers will be 158.78, where I will exit the short position and immediately open a long position in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Downward pressure on the pair will return 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 #2: I also plan to sell USD/JPY today if the price tests 159.23 twice consecutively while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and trigger a reversal to the downside. A decline toward the opposite levels of 159.05 and 158.78 can be expected.

What Is Shown on the Chart:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated price at which Take Profit can be placed or profits can be taken manually, as further gains above this level are unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated price at which Take Profit can be placed or profits can be taken manually, as further declines below this level are unlikely;
• MACD indicator. When entering the market, it is important to use the overbought and oversold zones as a guide.

Important. Beginner Forex traders should be very cautious when making decisions about entering the market. Before the release of important 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 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 inherently a losing strategy for an intraday trader.