Created on January 30, 2026

• The USD/JPY pair currently looks as if it is trying to find a floor in the market, near the crucial 200-day EMA.

The US dollar continues its attempt to stabilize against the Japanese yen during trading on Thursday as we have seen a lot of noise in this general vicinity. All things being equal, this is a market that I think will continue to look at the 200-day EMA just below as a potential floor in the market, which is currently sitting at the 152 yen level. As long as we stay above that area, I do think you start to talk about the possibility of the market turning things around. If and when it does, then I think a move back toward the 50-day EMA makes quite a bit of sense.

There were some grumblings about the Bank of Japan intervening and that wouldn’t be a huge surprise. But at this juncture, I also recognize that market participants are looking at this as a market that pays interest at the end of the day and a lot of people will continue to try to take advantage of the carry trade if in fact it is available to them.

Market Volatility and Support Levels

With this, I believe the volatility that we are seeing during the trading session is just a function of market participants trying to fight back. I do think that the US dollar is oversold, and I believe this is a potential bottom just waiting to happen. I also recognize that there are a lot of questions about the US dollar at the moment, so I don’t think this is something that you want to get extraordinarily aggressive on.

Rather, treat it more or less as a part of your diversified portfolio that pays your dividends occasionally or in this case daily and just helps pad returns for the year. The Japanese yen is not a currency I want to own, and the US dollar is oversold. You probably get more traction using a different currency against the yen, maybe such as the Australian dollar, but the market certainly looks like one that I think is setting up for some consolidation and a bigger move. All we have to do is wait to see which direction.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.