**Further Potential for USD Strength** In the next one to three weeks, the recent momentum of the USD suggests it might rise, though it’s uncertain if it can break through key resistance levels. Recent sharp rallies indicate that reaching 150.15 is possible, but to maintain this upward trend, it must stay above 148.50. This information includes forward-looking statements that carry risks and uncertainties. It is for informational purposes only and should not be seen as a recommendation to buy or sell. Always conduct thorough research before making investment decisions, as FXStreet does not guarantee the accuracy or timeliness of the information. All investment risks, including possible losses, are the investor’s responsibility. The US dollar is showing strong performance. While it may rise to around 150.15, the rally seems overextended. The market is currently overbought, which may limit any further gains. This creates a challenging environment for traders in the coming weeks. **Interest Rate Policy and Market Dynamics** The pressure for dollar strength is mainly due to the ongoing differences in interest rate policies. For example, the US inflation data for August 2025 showed 3.6%, which supports the Federal Reserve’s plan to keep rates high for longer. In contrast, the Bank of Japan has not shown much interest in tightening its policy, which helps the dollar. Traders expecting further movement might consider buying call options with strike prices around 150.00. This can help them benefit from potential gains while managing risk. If the momentum continues, these positions could perform well, but the premium paid is the maximum loss. This strategy aligns with the view that there is still some upward potential, even if it is limited. However, caution is advised as the 150-152 range is historically important. We saw the Japanese Ministry of Finance directly intervene to strengthen the yen around these levels in late 2022 and again in 2023. Therefore, buying put options with strike prices below 149.00 could be a smart hedge or a speculative play on a sharp downturn. Given the mixed signals of strong momentum and overbought conditions at a key intervention point, implied volatility is expected to rise. A long straddle strategy, which involves buying both a call and a put option, could be effective. This position would benefit from significant price movement in either direction—whether breaking above 150.15 or declining sharply. The crucial level to watch is the strong support at 148.50. If the price breaks decisively below this point, it would indicate the upward momentum has failed. Such a decline would invalidate the bullish outlook and likely lead to a rapid drop, making put options more profitable. Create your live VT Markets account and start trading now.

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