Asset: U.S. Dollar / Japanese Yen (USDJPY)
Date: May 29, 2025

1. Executive Summary

Based on comprehensive multi-timeframe analysis of USD/JPY price action and technical indicators, this report recommends executing a long position during the next pullback to the 145.20-145.40 support zone. The pair demonstrates strong bullish momentum with favorable risk-reward characteristics.

Recommended Trade Parameters:

Entry: Long position at 145.25 (pending order)
Stop Loss: 144.85 (40 pips below entry)
Take Profit: 146.45 (120 pips above entry)
Risk-Reward Ratio: 1:3
Position Size: 0.25 standard lots (25,000 units)

2. Market Analysis

2.1. Long-term Analysis

The weekly timeframe reveals USD/JPY in a sustained uptrend since mid-2021, with the pair recovering from the significant decline in 2024. The current price action shows consolidation within a broad range between 140.00-160.00, with recent bullish momentum suggesting potential for further upside. The RSI on the weekly chart indicates neutral to slightly bullish conditions at 44.85, providing room for additional gains without immediate overbought concerns.

2.2. Medium-term Analysis

The daily chart demonstrates a clear recovery pattern from the May lows around 142.00. The pair has established a series of higher lows and higher highs, confirming the bullish bias. Volume analysis shows increased participation during upward moves, supporting the legitimacy of the current trend. The 4-hour chart reveals successful retests of the 145.00 psychological level, which has transformed from resistance to support.

2.3. Short-term Analysis

The 4-hour timeframe shows a well-defined ascending channel with the pair currently trading near the upper boundary around 145.80. The 1-hour chart indicates short-term consolidation following the recent advance, with price action suggesting preparation for the next directional move. Key support levels are clearly established at 145.20-145.40 based on previous reaction points.

2.4. Intraday Analysis (5-Minute and 1-Minute Charts)

Intraday price action reveals a pattern of controlled pullbacks followed by renewed buying interest. The 5-minute chart shows consistent higher lows formation, while the 1-minute chart displays orderly price discovery without excessive volatility. Current market microstructure suggests institutional accumulation on weakness.

3. Technical Analysis

The RSI across multiple timeframes presents a favorable setup for long positions. The daily RSI at 68.03 indicates strong momentum without reaching overbought extremes. The 4-hour RSI at 57.62 suggests additional upside potential, while the 1-hour RSI at 66.78 confirms the bullish bias. This multi-timeframe RSI alignment supports the continuation of the upward trend.

Volume analysis reveals significant institutional interest, particularly evident in the substantial volume spike accompanying recent price advances. The volume profile suggests strong support at current levels, with accumulation patterns visible during consolidation phases. Price action demonstrates respect for key technical levels, indicating active participation from algorithmic trading systems and institutional players.

The pair has successfully maintained above the critical 145.00 psychological level, transforming this zone from resistance to support. The ascending trend line from recent lows remains intact, providing additional technical support for long positions. Fibonacci retracement levels align with identified support zones, reinforcing the validity of entry points.

4. Trading Strategy

4.1. Entry Parameters / Position

The optimal entry strategy involves placing a pending buy limit order at 145.25, positioned within the identified support zone. This entry point allows for favorable risk-reward characteristics while maintaining proximity to key technical levels. The entry should be executed only if price approaches this level with controlled selling pressure rather than aggressive dumping.

Alternative entry methods include waiting for bullish reversal signals at the support zone, such as hammer or doji candlestick patterns on the 15-minute chart, followed by immediate market entry. Traders should monitor volume during the approach to the entry zone, seeking evidence of buying interest emergence.

4.2. Exit Parameters / Position

The primary profit target is set at 146.45, representing the next significant resistance level based on previous price action and psychological round numbers. This target provides a 1:3 risk-reward ratio, meeting the minimum requirement for viable day trading opportunities.

Secondary exit strategies include partial profit-taking at intermediate resistance levels around 145.90 (50% of position) if reached within the first few hours of trade execution. Complete position closure is mandatory before the New York session close to maintain day trading discipline.

4.3. Ideal Entry Point

The most favorable entry conditions occur when price reaches 145.25 with decreasing selling volume and begins to show signs of stabilization through reduced volatility or formation of bullish reversal patterns. Ideal timing coincides with the Tokyo session opening or early European session when USD/JPY typically demonstrates increased volatility and directional clarity.

5. Risk Management

5.1. Stop Loss Parameters / Position

The stop loss is positioned at 144.85, representing a 40-pip risk and approximately 1% of the trading account. This level is placed below the identified support zone with sufficient buffer to account for normal market noise while remaining close enough to limit potential losses effectively.

The stop loss should remain static throughout the trade duration to maintain disciplined risk management. Any adjustment should only tighten the stop loss in favor of the position, never widening the initial risk parameters.

5.2. Risk Mitigation

Additional risk management measures include position size limitations to 0.25 standard lots, ensuring total account risk remains within acceptable parameters. Pre-market analysis of economic calendar events affecting USD and JPY is essential to avoid trading during high-impact news releases.

Market session timing consideration is crucial, with preference for execution during active Asian and European sessions when USD/JPY experiences optimal liquidity conditions. Continuous monitoring of correlations with other major pairs and risk-on/risk-off sentiment provides additional context for trade management decisions.

6. Position Sizing Calculation

Based on a $10,000 account balance with 1% risk tolerance:

Risk Amount: $100 (1% of $10,000) Stop Loss Distance: 40 pips Pip Value Calculation: $100 ÷ 40 pips = $2.50 per pip

Standard Lot Sizing:

Standard lot (100,000 units): Pip value ≈ $6.85
Required position: $100 ÷ $6.85 = 14.6 mini lots = 0.146 standard lots
Recommended: 0.25 standard lots (conservative approach)

Micro Lot Sizing:

Micro lot (1,000 units): Pip value ≈ $0.0685
Required position: $100 ÷ $0.0685 = 1,460 micro lots
Recommended: 250 micro lots (equivalent to 0.25 standard lots)

7. Trade Management Plan

Upon entry confirmation, immediate placement of stop loss and take profit orders is mandatory to ensure disciplined execution. Position monitoring should occur at regular intervals, with particular attention to price action around intermediate levels and volume characteristics.

If the trade moves favorably and reaches 145.90 (approximately 50% of the profit target), consider taking partial profits equal to 50% of the position size while maintaining the remaining position with a trailing stop at breakeven. This approach secures some profit while allowing for full target achievement.

Continuous assessment of market conditions, including broader risk sentiment and any emerging fundamental factors affecting USD/JPY, should guide intraday position management decisions. Any significant change in market structure or unexpected news events should prompt immediate position reevaluation.

Exit discipline is paramount, with mandatory position closure before 21:00 Bangkok time to maintain day trading parameters and avoid overnight exposure. Under no circumstances should positions be carried beyond the intended day trading timeframe.

8. Conclusion

The USD/JPY presents a favorable day trading opportunity with well-defined technical levels and strong momentum characteristics. The identified entry point at 145.25 offers excellent risk-reward potential with a 1:3 ratio, meeting institutional trading standards for viable trade execution.

The confluence of technical factors, including RSI alignment across timeframes, volume confirmation, and clear support/resistance levels, provides a solid foundation for the proposed trading strategy. Risk management parameters ensure capital preservation while allowing for meaningful profit potential.

Successful execution requires disciplined adherence to the defined parameters, continuous market monitoring, and strict risk management protocols. The strategy's viability depends on market conditions remaining consistent with the current technical setup.

USDJPY 1m Time Frame, May 29, 2025

USDJPY 5m Time Frame, May 29, 2025

USDJPY 15m Time Frame, May 29, 2025

USDJPY 1h Time Frame, May 29, 2025

USDJPY 4h Time Frame, May 29, 2025

USDJPY Daily Time Frame, May 29, 2025

USDJPY Weekly Time Frame, May 29, 2025

Financial Disclaimer

All information contained in this trading strategy report represents personal opinions and analysis based on technical chart interpretation. This content is provided for educational and informational purposes only and does not constitute financial advice, investment recommendations, or trading signals.

Trading foreign exchange carries substantial risk and may not be suitable for all investors. Past performance does not guarantee future results. Readers assume all risks when using this information for trading decisions. The author accepts no responsibility for any losses, damages, or adverse consequences that may arise from the use of this information.

All trading decisions should be made based on individual risk tolerance, financial situation, and investment objectives. Readers are strongly advised to conduct their own research and consult with qualified financial professionals before engaging in any trading activities.

(USD/JPY) Day Trading Strategy Report May 29, 2025

Table of contents