The test of the 157.51 price level in the first half of the day occurred when the MACD indicator had just started moving downward from the zero line, confirming a valid entry point for a short position on the US dollar. As a result, the pair declined toward the target level around 157.16.
Today, the Bank of Japan kept its interest rate unchanged at 1.25%, with the board voting 8-1 in favor of the decision. The key announcement was that core inflation had reached the 2% target for the first time. Kazuo Ueda elaborated on this point during his press conference. He said that core inflation had reached a level consistent with the target, but immediately added that the regulator needed to monitor the risk of inflation exceeding it. According to Ueda, the main question now is whether medium- and long-term inflation expectations have become anchored near the target. For this reason, "we have not yet reached the target." Ueda emphasized that financial conditions remain accommodative and that the Bank of Japan will adjust its policy as necessary to ensure that inflation stabilizes around 2%. He did not specify when the next rate hike might take place.
In the second half of today, attention will shift to the United States. The October Chicago PMI is expected to decline to 55.8 from 58.8, followed by a speech from Federal Reserve official Mary Daly. In a recent interview, she said that further rate hikes would probably be necessary, but there was no urgency, and the labor market remained stable. In my view, following Ueda's comments, USD/JPY will remain relatively stable around its recent levels, while the pair's direction will depend primarily on whether Daly reinforces the Fed's hawkish stance.
As for the intraday strategy, the main focus will be on implementing Scenarios No. 1 and No. 2.
Scenario No. 1: The plan is to buy USD/JPY today when the price reaches the entry level around 157.38 (the green line on the chart), with a target of 158.07 (the thicker green line on the chart). Around 158.07, the plan is to close long positions and open short positions, targeting a 30–35-point move downward from that level. The pair may advance today only if US economic data are strong. Important! Before buying, make sure that the MACD indicator is above the zero line and has just started rising from it.
Scenario No. 2: USD/JPY can also be bought today if the price tests the 156.97 level twice consecutively while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and trigger an upward market reversal. The pair could then rise toward the opposite levels of 157.38 and 158.07.
Sell SignalScenario No. 1: The plan is to sell USD/JPY after the 156.97 level is breached (the red line on the chart), which could lead to a rapid decline in the pair. The key target for sellers will be 156.44, where the plan is to close short positions and immediately open long positions, targeting a 20–25-point move upward from that level. Selling pressure on the pair could return today if the central bank intervenes. Important! Before selling, make sure that the MACD indicator is below the zero line and has just started declining from it.
Scenario No. 2: USD/JPY can also be sold today if the price tests the 157.38 level twice consecutively while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and trigger a downward market reversal. The pair could then decline toward the opposite levels of 156.97 and 156.44.
Important. Beginner Forex traders should be very cautious when making decisions about entering the market. Before the release of major fundamental reports, it is best to stay out of the market to avoid exposure to sharp exchange rate fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize potential losses. Without stop-loss orders, the entire trading account can be depleted very quickly, especially if you do not use proper money management and trade large volumes.
Remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on current market conditions is a fundamentally losing strategy for an intraday trader.