USD/JPY Extends Bullish Momentum Ahead of BoJ and Fed Decisions

In September, the consumer price index slowed from 0.4% to 0.3% month-over-month but accelerated from 2.9% to 3.0% year-over-year, slightly below the 3.1% forecast. The core CPI adjusted from 0.3% to 0.2% MoM and from 3.1% to 3.0% YoY, as expected. Additional support for the U.S. dollar came from October’s business activity data: the manufacturing PMI increased from 52.0 to 52.2 points, and the services PMI rose from 54.2 to 55.2, outperforming forecasts of 51.9 and 53.5, respectively.

The Bank of Japan will hold its meeting on Thursday and is expected to keep its monetary policy unchanged, though it may signal possible tightening in the near future. Pressure on the regulator has intensified following the appointment of Sanae Takaichi, leader of the Liberal Democratic Party, as Japan’s new Prime Minister. Known for her dovish monetary stance, her leadership, combined with volatile inflation trends, could complicate future interest rate hikes by the central bank.

Support and Resistance Levels

Bollinger Bands on the daily chart are flattening, forming a horizontal channel that widens slightly, opening the path for bulls to reach new local highs. The MACD is rising, maintaining a stable buy signal (histogram above the signal line). The Stochastic indicator, near its peak levels, has turned sideways, signaling potential overbought risks for the dollar in the very short term.

Resistance levels: 153.00, 153.70, 154.50, 155.00.

Support levels: 152.24, 151.50, 150.93, 150.50.

Trading Scenarios and USD/JPY Forecast

Long positions can be opened after a confident breakout above 153.70 with a target at 155.00. Stop loss — 153.00. Implementation time: 1–2 days.

If the pair resumes bearish momentum and breaks below 152.24, this may serve as a signal to open short positions with a target at 150.93. Stop loss — 153.00.