29.01.202520:06 Forex Analysis & Reviews: USD/JPY: Simple Trading Tips for Beginner Traders on January 29th (U.S. Session)

Trade Analysis and Recommendations for the Japanese Yen

The test of the 155.27 level occurred when the MACD indicator was just starting to move upward from the zero mark, confirming a valid buy signal for the U.S. dollar. However, this did not lead to a significant rally, and after a 20-point increase, demand for the dollar declined.

Today, all eyes are on the FOMC rate decision, which is expected to be unfavorable for risk assets, including the Japanese yen. This could lead to a sharp rise in USD/JPY. However, before entering long positions, traders should carefully analyze the FOMC statement and listen to Fed Chair Jerome Powell's press conference.

If the Fed decides to keep rates unchanged, this could strengthen the U.S. dollar, putting pressure on the yen and increasing the likelihood of a sharp USD/JPY rally. However, before opening buy trades, it is essential to carefully evaluate the FOMC statement to understand the Fed's economic outlook and policy direction.

The statement will provide insights into the Fed's assessment of current economic conditions, helping traders anticipate future monetary policy moves. Additionally, Powell's press conference will be critical, as his comments could significantly impact the market.

For today's intraday trading, I will primarily focus on Scenario #1 and Scenario #2, aiming to capitalize on the downtrend continuation.

Buy Signal

Scenario #1: Buying USD/JPY is an option when the price reaches 155.59 (green line on the chart), with a target at 156.27 (thicker green line on the chart). At 156.27, I plan to exit long trades and initiate a sell position, expecting a 30-35 point pullback. A strong bullish move is only likely if the Fed signals a firm stance on interest rates.

Important! Before entering a buy trade, ensure that the MACD indicator is above the zero mark and just starting to rise.

Scenario #2: Buying USD/JPY is also an option if the price tests 155.17 twice in a row, with the MACD indicator in the oversold zone. This setup would limit downside risk and trigger a market reversal upward. Potential targets: 155.59 and 156.27.

Sell Signal

Scenario #1: Selling USD/JPY is planned after a break below 155.17 (red line on the chart), which could lead to a rapid decline in the pair. The main bearish target is 154.50, where I will exit short trades and immediately enter a buy position, expecting a 20-25 point rebound. Selling pressure is more likely if the Fed adopts a dovish stance.

Important! Before entering a sell trade, ensure that the MACD indicator is below the zero mark and just starting to decline.

Scenario #2: Selling USD/JPY is also an option if the price tests 155.59 twice in a row, with the MACD indicator in the overbought zone. This setup would limit upward potential and trigger a market reversal downward. Expected targets: 155.17 and 154.50.

Chart Explanation

• Thin green line – Suggested buy entry level
• Thick green line – Expected Take Profit level, where price growth is unlikely to continue
• Thin red line – Suggested sell entry level
• Thick red line – Expected Take Profit level, where further price decline is unlikely
• MACD Indicator – Use overbought and oversold zones for trade confirmation.

Important Notes for Beginner Forex Traders

• Be cautious when entering trades. It is best to stay out of the market before major economic releases to avoid excessive volatility.
• If trading during news events, always set stop-loss orders to limit potential losses.
• Without stop-loss protection, your entire deposit could be at risk—especially if you trade with high leverage and large lot sizes.
• Successful trading requires a structured trading plan, like the one outlined above.
• Avoid impulsive trading decisions based on short-term market fluctuations—this is a losing strategy for intraday traders.