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25.04.2025 08:09 PM
USD/JPY: Simple Trading Tips for Beginner Traders – April 25th (U.S. Session)

Trade Analysis and Guidance for the Japanese Yen

The price test at 143.49 occurred just as the MACD indicator began moving down from the zero line, confirming a valid entry point for selling the dollar, resulting in a 20-point decline in the pair.

There are no major statistics in the second half of the day, but attention will turn to the University of Michigan Consumer Sentiment Index, a key barometer of consumer confidence in the economy. The index is based on surveys of consumers regarding their personal finances, business conditions, and future outlook. A higher reading suggests that consumers feel more confident in the economy and are therefore more likely to spend money—stimulating economic growth, which is positive for the dollar.

Inflation expectations, also tracked by the University of Michigan, play a significant role in shaping the Federal Reserve's monetary policy. If consumers expect inflation to rise in the future, they may demand higher wages and be more willing to pay higher prices, potentially fueling inflation. Given that inflation is already a concern in the U.S., the Fed will need to monitor inflation expectations closely.

I will primarily rely on Scenarios #1 and #2.

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Buy Signal

Scenario #1: I plan to buy USD/JPY today if the entry point at 143.75 (green line on the chart) is reached, aiming for a rise toward 144.46 (thicker green line on the chart). At 144.46, I plan to exit my long position and open a sell trade in the opposite direction (expecting a 30–35 point correction from that level). Bullish momentum will likely follow only if the U.S. data is very strong. Important! Before buying, ensure that the MACD indicator is above the zero line and just beginning to rise.

Scenario #2: I also plan to buy USD/JPY if there are two consecutive tests of the 143.21 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and likely lead to a bullish reversal. A rise toward 143.75 and 144.46 can be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY today after the price breaks below 143.21 (red line on the chart), which would likely result in a sharp decline. The key target for sellers will be 142.60, where I plan to exit the short position and immediately open a long trade in the opposite direction (expecting a 20–25 point rebound from the level). Bearish pressure on the pair could appear at any moment today. Important! Before selling, ensure that the MACD indicator is below the zero line and just beginning to fall.

Scenario #2: I also plan to sell USD/JPY if the 143.75 level is tested twice while the MACD is in the overbought zone. This will limit upward potential and trigger a bearish reversal. A decline toward 143.21 and 142.60 can be expected.

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What's on the chart:

  • Thin green line – entry price for long trades
  • Thick green line – projected Take Profit level, above which further upside is unlikely
  • Thin red line – entry price for short trades
  • Thick red line – projected Take Profit level, below which further downside is unlikely
  • MACD Indicator – pay close attention to overbought/oversold zones when entering the market

Important Reminder:

Beginner Forex traders should exercise extreme caution when entering the market. It is best to remain out of the market ahead of major economic reports to avoid sudden price swings. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Without stop-losses, you could quickly lose your entire deposit, especially if you trade large volumes and ignore risk management.

And remember, successful trading requires a clear plan—like the one outlined above. Making spontaneous decisions based on the current market situation is a losing strategy for intraday traders.

Jakub Novak,
Analytical expert of InstaForex
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