Uncertainty prevails in the financial markets during inauguration week and as the BoJ is expected to announce something. An event like the U.S. presidential inauguration impacts safe havens, while pressure mounts on traders with potential rate hikes from the BoJ. Navigating such turbulent waters is very challenging for traders looking for clear-cut opportunities.

This week, howtotrade.com focuses on providing actionable trade setups to help traders capitalize on market volatility. The live trading room and daily technical insights will be available to arm you with the right tools to handle challenges and discover profitable opportunities.
By tracing key events—such as reported rate hikes of the BoJ and Inauguration Day—the best trade setup of the week, including an extremely high probability USD/JPY strategy, guides you through key market events as we set off into a productive 2025.
Key Events to Watch
Inauguration Day and Safe Havens
Monday is Martin Luther King Jr. Day and President Trump’s swearing-in as the 47th U.S. president. Security concerns remain in the nation, which can result in individuals seeking more secure haven assets like gold and silver and bonds.
Traders will want to keep an eye on the opening of futures markets Monday evening, as heightened uncertainty could lead to significant moves in safe-haven markets. Gold and silver may particularly be volatile and offer some interesting trading opportunities for those looking to take refuge from riskier assets.
BoJ Interest Rate Decision
The major event for the week is on Friday during the Asian session. Rumors that the Bank of Japan (BoJ) might raise interest rates would surely send shockwaves and influence the Japanese yen (JPY) as well as other markets correlated with it. Major changes in USD/JPY, JPY crosses, and even the Nikkei index might occur if rumors are true.
Trade of the Week: USD/JPY Technical Setup
Overview
The USD/JPY daily chart does present an interesting opportunity for both scalping short and longer-term positioning. Since there was a golden cross appearing on December 13, this pair has gone on to exhibit a bullish trend, making it a good candidate for a buy-and-hold. However, the BoJ decision coming next introduces short-term volatility that the trader can capture with a smart scalp.
Levels to Watch
Resistance: The psychological level of 160 as well as its high in 2024, which is at 160.195.
Support: Retracement zone around 157.29, with a stop-loss set at 161.29 to manage the risk even tighter.
Trade Plan
Entry: Sell at around 159.75, with the aim of retesting 157.29 on the way down.
Stop-Loss: 161.29 (125 pips risk).
Reason: A move into resistance at 160 presents a high-probability shorting opportunity. In case the BoJ shocks with a rate hike, it could be used to amplify the pullback, creating ample room for massive profit.

Long-Term Perspective on USD/JPY
On the monthly chart, USD/JPY is testing historical levels not seen since the 1980s and 1990s. Markets have strong memory, and breaking above 2024’s high could open the floodgates for further upside. However, a potential BoJ rate hike might cause a sharp reversal.
Historical Context: The last spike near these levels occurred in April 1990. A breakout above this resistance could lead to uncharted territory for USD/JPY.
Market Sentiment: It would still be wise for traders to exercise caution despite the rising momentum. The high-impact event from the BoJ’s decision should keep any complacency in check.
Trade Safe Havens During Inauguration Week
News Headlines: Observe the happenings associated with Inauguration Day. Gold and silver are generally sensitive to geopolitical risks.
Focus Areas of Opening Sessions: Futures markets reopening Monday evening may set the tone for the week. Monitor early surges in safe-haven demand.
Be Flexible: Although long-term views of the trend remain bullish for USD/JPY, potential short-term scalps around key levels add more profits.
Why the BoJ Announcement Matters
Global implications are attached to the monetary policy decisions of the BoJ. A surprise rate hike would dramatically strengthen the yen, reversing the current trends in USD/JPY and would influence global equities, commodities, and bond markets.
Key Currency Pairs: Watch for significant volatility in JPY crosses such as EUR/JPY and GBP/JPY.
Impact on the Nikkei: Rate hike may put downward pressure on Japanese equities, creating an opportunity for index traders.
How to Stay Ahead in 2025
As can be seen, even in an unforeseen market setting, technical analysis paired with real-time news is the foundation for success.
Howtotrade.com offers daily reports, trade thoughts, and follows up on daily performance to update traders on trading decisions.
Conclusion
Inauguration week set the stage against the backdrop of the BoJ’s expected increase in interest rate. From this week, things are going to get volatile – from safe havens like gold all the way up to the strategy levels of USD/JPY.
You will do well to position yourself for the opening weeks of 2025 by focusing on actionable setups like the USD/JPY short near 160 and safe-haven plays during Inauguration Day. Join the live trading room at howtotrade.com for more daily trade ideas and in-depth analysis.
Take charge of your trading journey, embrace those opportunities ahead, and set the foundation for a profitable year.