3 Powerful Forex Trade Setups
Major G10 currencies are navigating the fallout from a dovish Bank of Japan policy update and underwhelming U.S. growth data as markets await key U.S. payrolls. The BOJ’s decision to cut its growth and inflation forecasts—while leaving rates unchanged—has reignited selling of the yen, pushing USD/JPY above 144 and EUR/JPY through its 200-day moving average. Meanwhile, the U.S. Dollar has held firm despite the first quarterly GDP contraction since 2022, as traders weigh the prospects for Fed rate cuts against safe-haven demand. EUR/USD remains confined to a 1.13–1.14 range ahead of Friday’s employment report, reflecting balanced risks between Fed dovishness and persistent global uncertainty.
| Rank | Pair | Direction | Entry | Stop Loss | Take Profit | Rationale | Confidence Reason |
 |
EUR/JPY | Buy on breakout | 164.20 – 164.40 | 163 | 165.50 – 166.00 | BoJ cut growth/inflation forecasts and kept policy dovish, sending JGB yields lower and igniting JPY-sell. Technicals favor bulls after 200-day SMA break. | Clear dovish BoJ impulse, strong technical consolidation; path of least resistance is higher. |
 |
USD/JPY | Sell on rallies | 145.00 – 145.25 | 146 | 142.50 – 141.50 | Double-whammy: dovish BoJ and defensive USD flows. Rally above 144.00 capped by risk environment; 145.00 is near-term tech resistance. | BoJ outlook remains dovish; stretched positioning near resistance. |
 |
EUR/USD | Buy on dips | 1.1320 – 1.1340 | 1.1275 | 1.1420 – 1.1460 | Pair trapped in 1.13–1.14 ahead of US payrolls. DXY range-bound despite US GDP contraction—buys dips as per Danske’s view. | Momentum intact in range; downside limited by Fed-cut odds and Eurozone GDP support. |
Notes Trade Setups
-
EUR/JPY surges on BoJ’s dovish forecast cuts. A break above 164.20 triggers fresh momentum toward 166.00.
-
USD/JPY remains capped by dovish BoJ and risk environment; selling into 145.00–145.25 offers defined risk.
-
EUR/USD continues to oscillate in the 1.13–1.14 band; buying dips remains preferred ahead of Friday’s US jobs, with limited downside as Fed cut probabilities climb.
Summary
EUR/JPY leads our high-conviction setups: the dovish BOJ impulse and technical breakout support further gains toward 165–166. USD/JPY is a tactical sell on rallies into 145.00–145.25, with stretched positioning and BoJ-driven yen weakness likely to cap upside. EUR/USD offers a buy-the-dip opportunity around 1.1320–1.1340, as range-bound dollar dynamics and rising Fed-cut odds limit downside ahead of U.S. payrolls. Collectively, these strategies capitalize on central-bank divergence and defined technical thresholds for disciplined entries and exits.
Check out more Forex Trade Setups on our forex page.
