Created on November 05, 2026

The U.S. dollar fell initially on Wednesday, perhaps in reaction to the elections. However, we have since seen the pair rally, as it aims for a resistance barrier. Ultimately, I am still bullish on the carry trade.

USD/JPY

The U.S. dollar initially did fall during the trading session in reaction, I suspect, to the election result, but has turned around to show signs of life. By doing so, this is a market that continues to see a massive amount of carry trading willing to jump in and take advantage of that ability to get paid at the end of every session.

At this point, it’s worth watching the 159 yen level

At this point, it’s worth watching the 159 yen level as a region that, if we can break above, then we could really take off to the upside. Short-term pullbacks, I think, open up the possibility of buying opportunities, and I do remain bullish on this pair as the Federal Reserve probably has to continue to look to the idea of raising rates in December, while the Japanese may, but even if they do, the interest rate differential is still pretty wide.

We get the jobs number on Friday. That will be a major factor to analyze in this pair as well. If we can break that 159 yen level, the 160 yen level would be the next target. Anything above there could open up a much bigger move, perhaps to the 164 yen level.

If we fall from here, I look at that as a buying opportunity, but if we were to break down below the 156.50 yen level, then I’d have to reassess things. As things stand right now, short-term dips continue to be buying opportunities. This is a market that I will not be looking to short anytime soon, as the markets offer pairs that won’t cost me to short dollars, assuming that I would want to.

Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.

Christopher Lewis is a technical analyst and market commentator at DailyForex with more than two decades of trading experience in Forex and other leveraged markets. Based in Columbus, Ohio, he specializes in chart-based analysis of major currency pairs, stock indices, commodities, and energy markets, focusing on clear support and resistance levels, trend structure, and risk management. Christopher produces daily written and video analysis for traders who rely on technical setups to navigate volatile market conditions

As seen on: Pairs Of Aces Podcast,The Trader Guy, FXEmpire