**USD/JPY Forecast Updates** In the short term, the USD was expected to “edge lower and test 151.20,” but it fell more sharply than predicted, hitting a low of 150.88 and closing at 151.04, a drop of 0.52%. A further decline toward 150.20 could happen, but breaking below this level may be tough without stronger momentum. To maintain a downward trend, the USD needs to stay below 151.55, with minor resistance at 151.25. Over the next 1-3 weeks, the current price movement is likely to continue within a trading range of 149.50 to 153.00. This view is supported by the FXStreet Insights Team, which comprises journalists and experts who share market observations from various analysts. Our current outlook for USD/JPY is bearish, with a possible drop toward the 150.20 level. This perspective is backed by last week’s disappointing US retail sales data, which showed only a 0.2% increase for September 2025, below expectations. We’ll maintain this downward outlook as long as the pair stays below the 151.55 resistance. **Trading Strategies for USD/JPY** To set up for this move, traders might think about buying short-dated put options with strike prices around 151.00 or 150.50. Expiring in late October or early November 2025 would directly target this expected dip. This strategy provides a defined-risk opportunity to take advantage of the anticipated near-term weakness. Looking beyond the immediate dip, we view these movements as the beginning of a new trading range, likely between 149.50 and 153.00. This situation is similar to the volatility we observed in 2022 and 2024, when Japanese authorities were particularly sensitive to these levels. With the Fed suggesting a potential pause and the Bank of Japan facing pressure from domestic inflation at 2.8%, the upward trend seems to have stalled. Once the market stabilizes, traders in derivatives may consider strategies that benefit from range-bound movements. Selling an iron condor with strikes outside the 149.50 and 153.00 levels could be effective in the coming months. This strategy would take advantage of time decay as long as USD/JPY stays within this new trading channel. Create your live VT Markets account and start trading now.

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