USD/JPY Intraday Analysis: Key Technical Levels and Macro Outlook

The USD/JPY pair experienced renewed price action following economic data releases from Japan and shifting political dynamics in the United States. Japan's October monetary base figures contracted by 13.6% year-on-year, slightly better than the market expectation of a 14.0% decline and up from September's 15.2% contraction. The slower pace of contraction indicates a less aggressive withdrawal of liquidity by the Bank of Japan, which remains fundamentally neutral for the yen.

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In the United States, strong labor market statistics initially supported the dollar, highlighted by stable hiring and elevated job openings. However, political developments following the US midterm elections—where the opposition gained control of both houses of Congress—put moderate downward pressure on the greenback. Geopolitical concerns surrounding Iran continue to act as a background factor for market sentiment.

In recent trading, a test of the 158.28 level coincided with a bullish MACD indicator moving upward from the zero line, confirming a valid entry for long positions. The pair subsequently reached its projected technical target at 158.74 before consolidating.

USD/JPY Bullish Scenarios

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Scenario #1: Traders looking to buy USD/JPY can consider long positions near 158.24, targeting a rally toward 158.62. At 158.62, long positions should be closed in favor of short positions aiming for a 30–35 point corrective decline. Long entries require confirmation that the MACD indicator is above the zero line and starting an upward trajectory.

Scenario #2: Long positions can also be initiated if USD/JPY completes a double test of the 158.02 support level while the MACD indicator is in oversold territory. This indicates downside exhaustion and sets up a potential reversal toward 158.24 and 158.62.

USD/JPY Bearish Scenarios

Scenario #1: Short positions are favorable following a sustained break below the 158.02 level, aiming for a primary downside target of 157.64. Around 157.64, traders should close short positions and consider immediate long entries targeting a 20–25 point rebound. Sell entries require the MACD indicator to be below the zero line and moving downward.

Scenario #2: Alternatively, short positions may be opened if price tests the 158.24 resistance level twice while the MACD indicator resides in overbought territory. This technical pattern signals limited upside momentum and points to a potential drop back toward 158.02 and 157.64.

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