Short-Term USD Surge

Analysts at UOB Group believe the US Dollar (USD) will likely gain strength against the Japanese Yen (JPY). They consider 153.80 as a key target for longer-term USD increases. Recently, the USD rose sharply, hitting a high of 152.04, which was above the expected range of 149.70 to 150.70. Analysts say that even with the current overbought signal, the USD might still rise above 153.00 today, with support levels at 151.80 and 151.30. In the next one to three weeks, previous expectations had the USD testing resistance between 150.90 and 151.20, but it has quickly moved beyond this range. Strong support is anticipated at 150.50, suggesting the USD might continue to strengthen, especially if it surpasses 153.80. It’s advisable to keep a positive outlook on the USD while there is potential for more gains given the current market situation. This analysis comes from the FXStreet Insights Team, who compile various market views from experts.

Strategic Considerations

The recent rise in USD/JPY indicates ongoing strength, hinting at more upside in the coming weeks. The current momentum seems robust enough to push past the overbought conditions, favoring strategies that benefit from a stronger dollar versus the yen. With 153.80 as the crucial level, buying call options with strike prices at or above 153.00 could be a good strategy. This is backed by the September 2025 US inflation data, which showed core CPI stubbornly at 3.1%. This data reinforces the expectation that the Federal Reserve will stick to its tight policy. Meanwhile, the Bank of Japan is slow in tightening, which gives the USD a strong boost. The key support level to monitor is 150.50; if it breaks below this, our bullish view will be challenged. Traders should use this level for setting stop-losses or considering put options as a safety measure. Additionally, we must recall the sharp interventions by Japanese authorities in late 2022 when the USD/JPY last traded in a similar range, adding risk to any long positions. As we approach the mid-150s, the possibility of intervention might increase implied volatility. Traders expecting a significant price shift, but unsure of the direction, might look into strategies like long straddles. Any official statements from the Ministry of Finance will be vital in the coming days. Create your live VT Markets account and start trading now.

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