The US Dollar (USD) may keep falling against the Japanese Yen (JPY), but it is unlikely to drop below 145.80, according to FX analysts. They believe the recent drop in USD/JPY is part of a phase where it will stay between 146.60 and 147.70. In the past day, the USD has bounced between 146.66 and 147.71, closing at 147.10, which is a small decrease of 0.17%. Analysts expect the USD/JPY to continue declining, but it should not fall below 145.80 unless it exceeds the strong resistance of 148.25.

Important Disclaimer on Financial Advice

This analysis is not financial advice. It’s recommended to do thorough personal research before making any financial moves, as trading involves risks and uncertainties. The author has no positions in any mentioned stocks and no business ties with related companies. In other market news, the EUR/USD is trading near 1.1650, and the GBP/USD is at 1.3450. Gold prices are facing challenges, influenced by the movements of the US Dollar. Canada expects rising unemployment, while the Bank of England has reduced rates further to 4%. With the USD/JPY pair staying steady, there’s an opportunity to sell volatility. Since the currency is expected to remain in a narrow range, strategies like using an iron condor or selling strangles with strike prices outside 146.60 to 147.70 could work well. This would allow profit from minimal price movement in the upcoming weeks. This viewpoint is reinforced by mixed economic data that hinders a clear trend. The latest US Non-Farm Payrolls report for July 2025 showed a gain of 185,000 jobs, which is just below the 200,000 expected, weighing on the dollar. On the other hand, Japan’s recent core inflation rate has cooled to 2.2%, reducing the pressure on the Bank of Japan to tighten its policies.

Key Support Levels and Market Strategy

We’re closely monitoring the 145.80 level as a crucial support for the currency pair. If it breaks below this level, it could indicate the end of the current consolidation and lead to a quicker decline. In such a case, we may need to adjust our strategy from selling volatility to buying put options to protect against or profit from further drops. Reflecting on the sharp moves that pushed the pair toward the 160 level in late 2023 and early 2024, the current low volatility indicates that the market is pausing. This stability suggests traders are awaiting clearer policy signals from either the Federal Reserve or the Bank of Japan. Until that happens, we expect the range-bound trading to persist. The broader market shows a general weakness in the US Dollar. With the EUR/USD trading near 1.1650 and the GBP/USD at 1.3450, the fact that USD/JPY isn’t falling more steeply indicates weakness in the Japanese Yen as well. This is likely because the Bank of Japan has been very careful with its policy adjustments since it ended negative interest rates in early 2024. The recent rate cut by the Bank of England to 4.0% has not weakened the pound much, suggesting the cut was already anticipated by the market. Gold prices are struggling despite the weaker dollar, as global interest rates, though lower than peaks, remain high enough to deter holding non-yielding assets. The increase in unemployment in Canada also hints at a slowing global economy, complicating the outlook for currency markets. Create your live VT Markets account and start trading now.

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