USD/JPY 1H Challenge
Past challenge from 2026-03-10. See the correct answer and explanation below.
SCENARIO
USD/JPY is at 150.80. Price has been in a strong uptrend on the daily chart. On the 1H, it just broke above 150.50 (a level that held as resistance for 3 days). However, the Bank of Japan has a rate decision in 4 hours. Implied volatility for the event is 2x normal.
Market Context
Markets are pricing in a 30% chance of a BoJ rate hike. If they hike, USD/JPY could drop 200-300 pips rapidly. If they hold, the uptrend likely continues.
Key Levels
Never hold positions through binary central bank events, especially when implied volatility is elevated. A BoJ rate hike could cause a 200+ pip move against you in seconds -- no stop loss will protect you from that slippage. The breakout above 150.50 is valid but should be traded after the event. Either close before the decision or wait for the outcome and trade the reaction.
Prop Firm Implications
FTMO daily loss limit could be breached in a single candle on a surprise BoJ hike. This is how accounts get blown -- not from bad analysis, but from event risk.
FundedNext consistency rules penalize large single-day swings. A BoJ-driven loss would damage your consistency score even if your overall P&L recovers.