Asset: U.S. Dollar / Japanese Yen (USDJPY)
Date: May 30, 2025

1. Executive Summary

Immediate Action Required: SELL USD/JPY upon a confirmed break below 144.200. Consider entry around 144.150 with a stop-loss at 144.550 (40 pips risk) targeting 142.950 (120 pips reward) for a 1:3 RR ratio. Expected trade duration: 4-12 hours, potentially spanning Asian and early European session overlap. If the 144.200 support holds and price shows strong bullish rejection, reassess for a long position or skip.

2. Market Context Analysis

2.1 Market Session Timing Analysis

Current Time: May 30, 2025, 10:18 AM GMT+7 (Bangkok Time).
Active Sessions: Tokyo session is well underway (approx. 12:18 PM JST). Liquidity for JPY pairs is typically good.
Upcoming Sessions: London session opens around 3:00 PM GMT+7. The overlap between late Asian and early European sessions (approx. 3:00 PM - 5:00 PM GMT+7) often brings increased volatility and trading volume, which could influence this trade.
Impact: The current timing is suitable for initiating a USD/JPY trade. Increased volatility during the session overlap could help in achieving the profit target if the setup plays out.

2.2 Long-term Trend Context (Weekly/Monthly)

Weekly Chart: The weekly chart shows a strong, multi-year uptrend in USD/JPY that peaked in late 2022 / early 2023 (around 152.000). Following this peak, the price experienced a significant correction downwards to below 130.000. More recently, the price has rallied again, forming a broad, somewhat choppy range or consolidation between roughly 135.000 and 150.000. The current price (around 144.322) is within this broader consolidation zone, having pulled back from the upper part of this range. The long-term momentum is mixed, with the primary uptrend paused.
Key Structural Levels (Weekly):
- Resistance: ~150.000, ~152.000
- Support: ~138.000, ~135.000, ~130.000
Implication: An intraday short trade would be counter to the very long-term (pre-2023) uptrend but could be seen as aligned with the more recent corrective/consolidative phase from the 2023-2024 highs.

2.3 Medium-term Setup (Daily/4H)

Daily Chart: The daily chart shows price action largely within a wide range after the significant drop from the 2024 highs (around 150.000-151.000, depending on exact peak). Price recently tested levels below 140.000, rallied towards 148.000, and is now in a corrective phase downwards. The current price is below the recent swing high near 148.000 and appears to be testing lower levels. The RSI (visible at the bottom) is not in extreme territory.
4-Hour Chart: The 4H chart provides a clearer view of the recent price action. A swing high was formed near 148.000. Since then, the price has declined, forming lower highs and lower lows, indicating a short-term bearish structure. The price recently bounced from ~141.500, rallied to ~145.500, and has now fallen back to ~144.300. The current price action is testing a support zone. A break below this zone could signal further downside.
Key Levels (Daily/4H):
- Resistance: ~145.500 (recent 4H high), ~146.500, ~148.000 (recent swing high)
- Support: ~144.000-144.200 (current area), ~143.000, ~141.500 (recent 4H low)
Bias: The medium-term bias is leaning bearish following the rejection from ~148.000 and the more recent failure at ~145.500. The proposed short trade aligns with this developing bearish momentum.

2.4 Short-term Dynamics (1H/30M)

1-Hour Chart: The 1H chart shows a sharp decline from the recent high around 145.500. Price has broken below what might have been a short-term ascending trendline (from the low near 143.700). The price is currently consolidating around 144.250-144.450 after this drop. The RSI is trending downwards and is below 50, suggesting bearish momentum. The moving averages (appearing as a channel) are starting to angle downwards.
30-Minute Chart (Implied from 1H and 15M): Similar to the 1H, the 30M would show the recent sharp drop and current consolidation. This timeframe would be crucial for observing the break of the immediate support.
Setup: The short-term dynamic is bearish after the recent rejection from 145.500. The current consolidation phase could be a pause before further downside.

2.5 Intraday Precision (15M/5M)

15-Minute Chart: The 15M chart shows the current price at 144.322, hovering just above a minor support level around 144.200-144.250. A series of lower highs and lower lows is evident in the most recent price action. A clear break below 144.200 would strengthen the bearish case. The RSI is in neutral to slightly bearish territory.
5-Minute Chart: The 5M chart offers a granular view of the current consolidation. It will be used to time the entry precisely upon a break of support, looking for increased volume and bearish candle patterns.
Trigger: A sustained break below 144.200 on the 15M/5M charts, ideally with a bearish candle closing below this level, would serve as the entry trigger.

3. Comprehensive Technical Analysis

3.1 Critical Technical Observations

Rejection from Higher Levels: Price was rejected from ~145.500 on the 1H/4H charts, indicating selling pressure.
Break of Potential Short-Term Trendline: The upward momentum from ~143.700 has been broken on the 1H chart.
Developing Bearish Structure: Lower highs and lower lows are beginning to form on 1H and 4H charts after the recent peak.
RSI Momentum: RSI on 1H is below 50 and pointing down, supporting bearish momentum. Daily RSI is neutral but turning down from higher levels.
Consolidation at Support: Price is currently consolidating near immediate support (144.200-144.300). A break of this support is key for the bearish scenario.

3.2 Price Action Forensics

Recent Candles (1H/4H): Recent 1H candles show increased selling pressure from 145.500. The current consolidation shows indecision, but the preceding move was strongly bearish.
Rejection Levels: 145.500 stands out as a strong intraday rejection point. The area around 144.700-144.800 also showed some resistance on the 15M chart during the fall.
Momentum: The sharp drop from 145.500 to ~144.250 indicates strong bearish momentum. The current pause could be for order accumulation before the next move.

3.3 Technical Indicator Confluence

Moving Averages (Implied from channel on charts): On 1H and lower timeframes, price has crossed below the moving average channel, which is now acting as resistance.
RSI: As mentioned, RSI across multiple timeframes (1H, potentially 30M, 15M) is aligning to suggest bearish momentum or at least a weakening of bullish momentum.
Volume (Visual assessment from charts): Volume bars on the charts show some increase during the recent sharp downward move. A spike in volume on the break of 144.200 would be a strong confirmation. Actual volume data from MT5 is preferred.

3.4 Volume and Market Microstructure

Volume Patterns: Increased volume on bearish candles during the recent decline from 145.500 would support bearish sentiment. Monitor volume closely during the potential breakout below 144.200.
Bid-Ask Dynamics: To be observed on MT5. A thinning of bids and an increase in offers around the breakout level would support the short entry.
Order Flow: If available. Signs of significant sell orders accumulating above current price or stop-loss clusters being targeted below 144.200 could provide further conviction.

4. Tactical Trading Strategy

4.1 Entry Strategy and Execution

Primary Entry: Place a SELL STOP order at 144.150.
- Confirmation: This order triggers on a break below the immediate support zone of 144.200. Monitor 5M/15M charts for a decisive bearish candle closing below 144.200 before the order is hit, or as it's hit, for added confirmation.
Alternative Entry: If price breaks 144.200 aggressively and quickly moves lower, consider a market order if 144.150 is missed, but only if the price is still below ~144.050 and the stop-loss at 144.550 still provides a 1:3 RR to 142.950.
Backup Entry: If price initially fakes a breakout lower, then pulls back to retest the broken 144.200 level (now resistance), a short entry can be considered on bearish rejection from this retest, with a stop slightly above the retest high.

4.2 Profit Target Framework

Primary Target (TP): 142.950
- Rationale: This level corresponds to a significant support area visible on the 4H chart (previous consolidation/lows from mid-May). It offers a 120-pip reward.
Secondary Target/Consideration: If strong bearish momentum persists, a trailing stop could be employed below 142.950, or a partial profit taken, with the remainder targeting lower structural levels around 142.000 or 141.500 (recent 4H low). However, for an intraday trade, 142.950 is a substantial primary target.

4.3 Stop-Loss Strategy and Risk Control

Stop-Loss (SL): 144.550 (40 pips risk)
- Rationale: This level is placed above the recent consolidation highs on the 15M/1H charts (around 144.450-144.500) and slightly above the high of the current 1H candle (assuming its formation). A move above this level would invalidate the immediate bearish structure and suggest the support at 144.200 held or the breakout was false.
Trailing Stop: If the trade moves favorably by more than 1:1 RR (i.e., price reaches 143.750), consider moving the stop-loss to breakeven (144.150). A more aggressive trailing stop (e.g., 20-pip trail) could be used if price accelerates towards the target.

4.4 Optimal Timing and Market Conditions

Ideal Time Window: Entry within the next 1-3 hours (during the Asian session or leading into the London open). The London open (around 3:00 PM GMT+7) and its overlap with the Asian session can provide the necessary volatility.
Favorable Conditions: Increased volume on breakout, continued JPY strength or USD weakness, bearish sentiment in broader markets.
Adverse Conditions: Strong rejection from 144.200 with bullish engulfing patterns, unexpected positive USD news or negative JPY news, low volatility leading to choppy price action. If these occur, skip or reconsider the trade.

5. Risk Management Framework

5.1 Multi-Layered Risk Mitigation

Position Sizing: Strictly adhere to 1% account risk ($100 maximum loss on $10,000 account).
Maximum Loss Tolerance: $100 per this trade.
Scenario Planning:
- False Breakout: If price breaks 144.200 then quickly reverses above 144.550, the trade is stopped out. Do not re-enter immediately unless a new, clear setup forms.
- Extended Consolidation: If price consolidates between 144.150 and 144.550 for an extended period (e.g., > 4 hours) without moving towards the target, consider closing the trade or tightening the stop-loss.
Gap Risk: Low, as it's an intraday trade. However, be mindful of weekend gap risk if holding (not planned here).
Liquidity: USD/JPY is highly liquid. Execution issues are unlikely but always possible during extreme volatility.
Platform Risk: Ensure stable internet and MT5 platform connection.

5.2 Trade Correlation Assessment

Trader to assess: If holding other JPY-related or USD-related positions, ensure this trade does not overly concentrate risk. For example, if already short EUR/JPY, adding a USD/JPY short increases exposure to JPY strength.

6. Position Sizing Calculations

Account Balance: $10,000
Maximum Risk Per Trade (1%): $100
Stop-Loss Distance: 40 pips (144.150 entry - 144.550 SL)
Value Per Pip for USD/JPY (Standard Lot):
- Standard MT5 Calculation for USD/JPY on a USD account:
  - 1 pip = 0.01 JPY
  - Value of 1 pip for 1 standard lot (100,000 USD) = (0.01 JPY / Exchange Rate) * 100,000 USD
  - Value per pip in USD = (0.01 JPY / 144.150 JPY per USD) 100,000 USD = $69.37 0.01 = $0.6937 * (Lot Size in units of base currency / 1000)
  - A simpler way: For a standard lot (100,000 units of base currency, which is USD here), the value of a pip in the quote currency (JPY) is 100,000 * 0.01 = 1000 JPY.
  - To convert this to USD: 1000 JPY / 144.150 (rate at entry) = $6.937 per pip per standard lot.
Calculation for Position Size:
- Risk Amount / (Stop Loss in Pips * Value Per Pip per Lot) = Position Size in Lots
- $100 / (40 pips * $6.937/pip/lot) = $100 / $277.48 per lot = 0.3604 standard lots
Standard Lot Sizing:
- Risk Amount: $100
- Stop Loss Distance: 40 pips
- Value per pip for 1 standard lot of USD/JPY (at entry 144.150): (0.01 / 144.150) * 100,000 = $6.937 approximately.
- Position Size = $100 / (40 pips * $6.937/pip) = $100 / $277.48 = 0.36 standard lots (rounded to nearest MT5 allowable size, typically 0.01 increments). So, 0.36 lots.
- (Units: 0.36 * 100,000 = 36,000 units of USD)
Micro Lot Alternative (0.01 lots):
- Value per pip for 1 micro lot (1,000 units USD): $6.937 / 100 = $0.06937 per pip.
- Position Size in micro lots = 0.36 standard lots * 100 = 36 micro lots.
- Risk with 36 micro lots = 36 $0.06937/pip 40 pips = $99.89 (approx. $100).
Fractional Risk Percentages:
- 0.5% Risk ($50): Position Size = 0.18 standard lots (or 18 micro lots).
- 0.25% Risk ($25): Position Size = 0.09 standard lots (or 9 micro lots).
MetaTrader 5 Minimum Position Size: Typically 0.01 standard lots (1 micro lot). The calculated sizes are above this minimum.

7. Dynamic Trade Management Plan

7.1 Trade Monitoring Protocol

Initial Phase (Entry to +40 pips / 1:1 RR): Monitor closely on 5M/15M charts for momentum. If price stalls significantly or shows strong rejection before reaching 1:1 RR, consider tightening SL or exiting.
Checkpoint 1 (Price reaches ~143.750 / 1:1 RR): Move SL to breakeven (144.150).
Checkpoint 2 (Price approaches ~143.350 / 1:2 RR): Consider taking partial profit (e.g., 30-50%) and trailing the stop on the remainder (e.g., trail by 30 pips or below recent 15M swing highs).
End of Asian Session / Approaching London Close: If the trade is open and profitable but far from TP towards the end of your intended trading window (e.g., before major news if not closing before market close, or before end of day if strictly intraday), consider closing or tightening SL aggressively. Since this is intraday, ensure closure before EOD.

7.2 Scenario-Based Response Plans

Unexpected News (High Volatility):
- Favorable move: Let profits run, potentially trail stop more aggressively.
- Adverse move: If price rapidly approaches SL, let SL execute. Do not widen SL.
Technical Breakdown (Invalidation of Setup): If price breaks back above 144.550 (SL hit), the bearish setup is invalid. Do not re-enter short unless a new, distinct bearish setup forms at a higher level.
Extended Consolidation Post-Entry: If price enters and then moves sideways in a tight range (e.g., +/- 15 pips from entry) for over 2-3 hours without clear direction, consider exiting the trade at or near breakeven to free up capital and avoid holding through uncertain conditions.

7.3 Exit Strategy Optimization

Primary Exit: At TP of 142.950.
Partial Profits: As described above, consider taking partial profits at 1:2 RR to secure some gains.
Early Exit (Negative): If price action strongly suggests the trade is failing (e.g., strong bullish reversal patterns forming well before SL), consider manual exit to cut losses short, though the SL is there for this purpose.
End-of-Session Management: As this is an intraday trade, all positions must be closed before the end of your trading day or before major market closures that could lead to illiquidity/gaps (e.g., Friday close if not planning to hold over weekend, which is not the case here). Aim to close before 10:00 PM GMT+7 if target isn't hit, or based on price action.

8. Strategic Conclusion and Key Takeaways

This USD/JPY short strategy is based on a developing bearish structure following a rejection from recent highs, with the immediate trigger being a break of key short-term support at 144.200. The 1:3 risk-reward ratio meets the predefined criteria.

Critical Factors for Success:
1. A decisive break below 144.200 with good volume.
2. Continued bearish momentum on 1H and 15M timeframes.
3. Absence of sudden strong USD buying or JPY selling pressure.
Primary Risk Factors:
1. False breakout below 144.200 (support holds).
2. Unexpected news events causing market reversal.
3. Insufficient bearish momentum to reach the profit target.
Next Steps:
1. Set SELL STOP order at 144.150 with SL at 144.550 and TP at 142.950.
2. Verify spread conditions on MT5.
3. Monitor price action closely around 144.200 for breakout confirmation.
4. Adhere strictly to the risk and trade management plan.

Mandatory Financial Disclaimer

The analysis presented in this report represents personal opinion and educational content only. All trading involves substantial risk of financial loss, and past performance does not guarantee future results. Readers assume complete responsibility for all trading decisions and their financial consequences. The author accepts no liability for any losses, damages, or adverse outcomes resulting from the use of this information. All traders should conduct independent research, consider their financial situation and risk tolerance, and potentially consult with licensed financial advisors before making trading decisions. The foreign exchange and derivatives markets carry high risk and may not be suitable for all investors.

(USD/JPY) Day Trading Strategy Report May 30, 2025

Table of contents