Created on October 01, 2025

• The US dollar initially rallied against the Japanese yen during the trading session here on Tuesday to reach towards the 149 yen level but then pulled back significantly to break below the 200 day EMA at least for part of the session. The 50 day EMA also offer support. So now that we have, it has shown itself to be a little bit more resilient. I think you’ve got a situation where traders just aren’t willing to go too deep into the market as the non-farm payroll uh comes out on Friday.
• That being said, I think you still have to favor the upside due to the swap differential. The interest rate differential still favors the US dollar regardless, and if we can break above the 149 yen level, I think we have a real shot at going to the 150 yen level, possibly even 151 yen. Anything about that then becomes buy and hold. I have been buying dips along the way for several months now.
• And I think that is going to be how I continue to play this market. Just simply collecting swaps to get paid, to hang on to the trade and then collecting my gains as they occur.

On a Break Lower

If we were to break down below the 146 yen level, then it’s likely that we really will start to fall apart, perhaps reaching down to the 143.50 yen level. The market remains a little bit noisy, but really that’s not a huge surprise. Just think of all of the drama going on at the same time. And with that being the case, it’s difficult for people to get overly aggressive in any particular position. That includes the dollar against the yen, but over the longer term, I still prefer the US dollar over the yen, at least until we break down below the 146 yen level.

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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.