29.07.202613:21 Forex Analysis & Reviews: USD/JPY: Trading Tips for Beginner Traders on July 29 (US Session)

Trade analysis and trading advice for the Japanese yen

The 163.63 price test occurred when the MACD indicator had just started moving upward from the zero line, confirming the correct entry point for buying the dollar. As a result, the pair rose by only 5 points, and that was the end of the move.

The key event of the day will be the FOMC decision on the benchmark interest rate, along with the accompanying statement and Kevin Warsh's press conference. The outcome of the meeting directly affects the Japanese yen, which is highly dependent on Fed policy and US bond yields. The regulator's tone will shape expectations regarding future steps, so the market will closely monitor every signal. As mentioned above, the Japanese yen will respond to the decision through yield differentials. In the event of an unexpected tightening or hawkish comments from Warsh, the dollar could strengthen significantly, pushing USD/JPY higher due to a widening interest rate gap with Japan. However, another sharp rise in the pair would once again intensify concerns about currency intervention, as the Bank of Japan has repeatedly entered the market to support the yen during periods of excessive and rapid weakening. A dovish outcome of the meeting, on the contrary, would reverse the pair lower and ease this pressure.

Regarding the intraday strategy, I will focus primarily on implementing Scenarios #1 and #2.

Buy signal

Scenario #1: Today, I plan to buy USD/JPY when the entry point is reached around 163.75 (the green line on the chart), with a target of growth towards the 164.31 level (the thicker green line on the chart). Around 164.31, I will exit long positions and open short positions in the opposite direction (expecting a move of 30–35 points in the opposite direction from the level). A rise in the pair today is possible, but the potential is rather limited. Important: Before buying, make sure that the MACD indicator is above the zero line and has only just started rising from it.

Scenario #2: Today, I also plan to buy USD/JPY if the price tests the 163.51 level twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal of the market upwards. Growth towards the opposite levels of 163.75 and 164.31 can be expected.

Sell signal

Scenario #1: Today, I plan to sell USD/JPY after the 163.51 level is updated (the red line on the chart), which could lead to a rapid decline in the pair. The key target for sellers will be the 162.83 level, where I will exit short positions and immediately open long positions in the opposite direction (expecting a move of 20–25 points in the opposite direction from the level). Pressure on the pair will return today in the event of central bank intervention. Important: Before selling, make sure that the MACD indicator is below the zero line and has only just started declining from it.

Scenario #2: Today, I also plan to sell USD/JPY if the price tests the 163.75 level twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal of the market downwards. A decline towards the opposite levels of 163.51 and 162.83 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 estimated price level where Take Profit orders can be placed or profits can be manually secured, 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 estimated price level where Take Profit orders can be placed or profits can be manually secured, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to consider overbought and oversold zones.

Important. Beginner Forex traders should make trading entry decisions with great caution. Before the release of important fundamental reports, it is best to stay out of the market to avoid exposure to sharp exchange rate fluctuations. If you decide to trade during news releases, always place stop orders to minimise losses. Without stop orders, you can lose your entire account very quickly, especially if you do not use money management and trade large volumes.

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.