Created on August 05, 2025

• The US dollar has been all over the place during the trading session here on Monday against the Japanese yen, as we are sitting just below the 200 day EMA.
• The 200 day EMA, currently sitting basically at the 148 yen level, is something that I will be watching closely, mainly due to the fact that we have quite a bit of previous noise in that same area.
• And of course, Friday was a horrific candlestick. Nonetheless, if we can break above the 200 day EMA on a close on the daily chart, then I think we could go looking at the 151 yen level again.

This was a move towards safety, but quite frankly, the Federal Reserve is not going to suddenly be collapsing rates.

US Dollar Fighting Back Against Others

While the Japanese yen may put up a fight, it’s interesting that several of the other stronger currencies actually couldn’t hang on to the gains for the day against the yen. And with that being the case, the market could very well bounce from here, but I think it’s got a lot of effort that it’s going to need to do in order to truly send markets to the upside.

If we fall from here, then we could be looking at a move down to the 50 day EMA. Anything below the 50 day EMA then could send the S dollar down to the 146 yen level. That of course is an area that’s been important a couple of times and anything below there could open up a move down to the 143 yen level.

Ultimately, I think we’re in an area of somewhat balance. So, I think we probably see a little bit of back and forth, but ultimately, I still think the US dollar has a fair shot of rallying here, but we need a day or two of stabilization.

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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.