FX.co ★ USD/JPY: Tips for Beginner Traders on February 25th (U.S. Session)

Trade Review and Trading Advice for the Japanese Yen

The test of the 155.76 level occurred when the MACD indicator was just beginning to move upward from the zero mark, confirming a proper entry point for buying the dollar. As a result, the pair rose by 50 points.

In the second half of the day, a wave of speeches by key figures from the U.S. Federal Reserve is expected, which will undoubtedly attract heightened interest from financial market participants. Among the speakers are Thomas Barkin, Jeffrey Schmid, and Alberto Musalem. Particular attention will be paid to any statements regarding inflation and the labor market. Price pressures are one of the key factors in the Fed's decision-making process, and any deviation from forecasts could either strengthen or weaken expectations regarding the regulator's next steps.

In addition, it is important to remember that the main pressure on the yen currently stems from government actions and reshuffling within the Bank of Japan's board of governors. The prime minister's appointment of officials more supportive of a dovish policy to new positions will inevitably worsen the outlook for further interest rate hikes, which is currently reflected in the active decline of the Japanese yen — a trend likely to continue in the near term.

As for the intraday strategy, I will mainly rely on implementing Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, I plan to buy USD/JPY upon reaching the entry point around 156.87 (green line on the chart), with a target at 157.35 (thicker green line on the chart). Around 157.35, I will exit long positions and open short positions in the opposite direction (targeting a 30–35 point move in the opposite direction from that level). The pair can be expected to rise today following a hawkish tone from the Federal Reserve.Important! Before buying, make sure that the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in the event of two consecutive tests of the 156.55 level while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 156.87 and 157.35 can be expected.

Sell Signal

Scenario No. 1: Today, I plan to sell USD/JPY after a break below the 156.55 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be 156.15, where I will exit short positions and immediately open long positions in the opposite direction (targeting a 20–25 point move in the opposite direction from that level). Pressure on the pair will return in the event of weak economic reports.Important! Before selling, make sure that the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today in the event of two consecutive tests of the 156.87 level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 156.55 and 156.15 can be expected.

Chart Explanation

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated level for setting Take Profit orders or manually locking in profits, 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 level for setting Take Profit orders or manually locking in profits, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to rely on overbought and oversold zones.

Important

Beginner Forex traders should be extremely cautious when making market entry decisions. Before the release of important fundamental reports, 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-loss orders to minimize losses. Without stop-loss orders, you can very quickly lose your entire deposit, especially if you do not apply proper money management and trade large volumes.

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