USD/JPY Technical Analysis: Key Levels Following BoJ Decision

The Bank of Japan (BoJ) held its benchmark interest rate unchanged at 1.25% in an 8-1 vote, highlighting that core inflation has reached its 2% target for the first time. BoJ Governor Kazuo Ueda noted that monetary policy remains accommodative as the central bank monitors whether medium- and long-term inflation expectations solidify near the target before considering further rate adjustments.

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Market attention now turns to the United States session, where the October Chicago PMI is forecast to ease to 55.8 from 58.8. Investors will also monitor comments from Federal Reserve official Mary Daly, whose stance on persistent rate pressure and labor market stability could dictate short-term U.S. dollar momentum against the yen.

Earlier in the trading day, USD/JPY tested the 157.51 resistance level, triggering a valid short entry on the MACD indicator that resulted in a decline toward the 157.16 target. USD/JPY is currently holding in a consolidation phase, with further direction contingent on upcoming U.S. data and central bank commentary.

Bullish Technical Outlook

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A primary buying opportunity is structured around an entry level of 157.38, targeting an upside objective of 158.07, contingent on the MACD indicator remaining above the zero line and moving upward. At the 158.07 level, traders may consider closing long positions and looking for potential short reversals targeting a 30-to-35-point pull-back.

An alternative long entry opens if price action retests the 156.97 support level twice consecutively while the MACD indicator signals oversold conditions. This double-bottom pattern would limit further downside risk and potentially spark a recovery back toward 157.38 and 158.07.

Bearish Technical Outlook

A sustained break below the 156.97 support level, supported by a MACD indicator below the zero line, opens a short position targeting 156.44. Upon reaching 156.44, traders should look to exit short positions and monitor for potential long entries aiming for a 20-to-25-point bounce.

Additionally, a sell scenario triggers if USD/JPY tests resistance at 157.38 twice without breaking higher while the MACD indicator is in overbought territory. This setup signals limited upward momentum and a potential reversal back toward support levels at 156.97 and 156.44.

Due to expected market volatility around macroeconomic announcements, disciplined risk management and strict stop-loss orders remain crucial for intraday positioning.

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