USD/JPY Forecast 06/10: US Dollar Rallies Against JPY

2025-10-06 02:15:07

(MENAFN- Daily Forex)

The US dollar rallied against the Japanese yen during the early hours on Friday, but we have seen a certain amount of resistance in this market, as this pair continues to be very noisy.
That doesn't surprise me, because it has been very choppy for months, even though we at one point got a bit of a“false break out.” The candlestick for the Friday session looks like it is going to close positive, but I also recognize that the 200 Day EMA has offered significant resistance, and therefore it suggests that perhaps the market isn't quite ready to take off to the upside, and we may be stuck in the same consolidation for a while.

EURUSD Chart by TradingViewTechnical Analysis

The technical analysis for this market is very sideways and has been for a while, with the brief exception of a quick attempt to break out and above the ¥149 level. The market continues to see a lot of noisy behavior but that makes sense because quite frankly there are a lot of questions out there as to whether or not we are going to see risk appetite pick up or drop. Furthermore, you also have to keep in mind that recently we have been bouncing around between the ¥146 level on the bottom, and the ¥149 level on the top. As we try to break out of there, we have seen a complete repudiation of that, but we have not broken down below the ¥146 level with any significance to show signs of potentially continued bearishness.

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Ultimately, I still like the idea of buying short-term dips looking for collecting swaps at the end of each day, as interest rate differential still most certainly favors the United States dollar. If we get any type of“risk on move” in the overall markets, then it's likely that this pair will rally as well. I still favor the upside but I fully admit that this is a very noisy and choppy market.

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