USDJPY Trade Setup – 3rd Nov

USD/JPY begins the week on a firm footing near 154.25, with the pair consolidating below the critical 155.00 resistance as traders position ahead of the U.S. ISM Manufacturing PMI release and this week’s heavy U.S. data calendar. Despite sustained dollar strength on resilient U.S. yields and hawkish Federal Reserve commentary, the yen remains underpinned by elevated intervention risk following persistent warnings from Japan’s Ministry of Finance. With Japanese markets closed earlier today for Culture Day and liquidity thinning into the 15:00 UK (10:00 ET) options cut, price action has been driven by positioning and option hedging flows rather than new macro impulses. Technically: USD/JPY is hovering near multi-decade resistance zones, with momentum indicators showing early divergence and intraday rejection patterns forming under 155.00. The macro asymmetry is notable: while fundamental yield spreads still support the dollar, the risk of direct or verbal intervention rises exponentially on moves toward 155.50 – 156.00, creating an ideal setup for strategic short fades with well-defined risk. USDJPY Trade Setup: Pair / Asset Bias & Entries Stop / Invalidation Targets Why A+ (fundamentals, technicals, sentiment/positioning) Near-term catalysts (UK time) USD/JPY SHORT fade 154.95 – 155.10; add 155.50 – 155.70 on spike 156.30 H4 close (hard: 156.60 if disorderly) 153.60 – 152.80 (stretch 152.00) Fundamentals: USD underpinned into ISM 15:00; Japan was shut in Asia, thin liquidity & elevated intervention rhetoric keeps asymmetric topside risk. Technicals: Persistent rejections sub-155.00; momentum divergence from late-Oct highs. Sentiment: NY-cut 10:00 ET: big legacy strikes 150.00 / 151.50 / 152.50; dealers likely short-gamma up here → pre-cut whips then mean-revert; stops expected above 155.10 / 155.50 and below 153.50 / 153.20 from prior swing zones. Today (Nov 3rd) 14:55 – 15:05:  option-cut chop; 15:00 ISM Mfg (first business day, 10:00 ET) then Fed speakers; All day MoF jawboning risk. Chart by TradingView – USDJPY Trade Setup – 3rd Nov Conclusion: USD/JPY continues to trade at the intersection of policy divergence and intervention vigilance, a uniquely volatile mix that favours disciplined tactical selling into strength rather than chasing upside. With sizable option expiries layered below spot and stop clusters visible above 155.10 and 155.50, the pair remains prone to pre-expiry whipsaws followed by mean reversion once hedging flows subside. From a multi-factor perspective, the short setup maintains an A+ conviction score (3/3): the fundamentals (Japan inflation firming, Fed near-peak cycle), technicals (extended RSI, resistance confluence), and sentiment (crowded long USD/JPY carry, heavy speculative length) all align for a controlled fade into strength. Near-term volatility around the ISM release and option cut may provide the trigger. We continue to favour short exposure from 154.95 – 155.70 with downside targets at 153.60 and 152.80, maintaining vigilance for policy headlines that could rapidly amplify yen strength. This analysis is for informational purposes only and does not constitute investment advice. Trading involves risk; manage exposure accordingly. For similar FX Trade Setups please visit our FX Trade Ideas page. Please visit our Disclaimer page. Disclaimer Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. TerraBullMarkets.com does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets or any financial instrument involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TerraBullMarkets.com nor any of its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page. TerraBullMarkets.com and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. TerraBullMarkets.com and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted. The author and TerraBullMarkets.com are not registered investment advisors and nothing in this article is intended to be investment advice.     TerraBullMarkets...