Insights 
VT 
The US Dollar (USD) might reach 153.00 again before a notable pullback is anticipated. In the long-term view, the USD is expected to strengthen further, with the level of interest being 153.80.
In the past few days, USD showed a strong upward trend, rising to 152.99 before a slight pullback, closing at 152.68, marking the fifth consecutive day of gains. Despite being overbought, another attempt to test 153.00 may occur before any significant reversal. Support levels are at 152.00 and 151.50.
USD Prospects Over One to Three Week Period
Over a one to three-week period, optimism for USD was noted at the start of the week. Even with USD at 150.35, further strength was projected, with attention on the 153.80 level. This perspective is maintained as long as the strong support remains at 150.90, previously noted at 150.50.
Given the persistent upward momentum, we believe the US dollar is poised to test the 153.00 level against the yen within the next one to three weeks. Traders could consider buying call options with a strike price of 153.00 or slightly above, expiring in late October or early November 2025. This allows for capitalizing on the expected final push while clearly defining the maximum potential loss.
This bullish stance on the dollar is reinforced by recent economic data showing a divergence in central bank policy. The US core inflation rate for September 2025, released just this week, came in at a stubborn 3.6%, keeping pressure on the Federal Reserve to maintain its restrictive stance. In contrast, the Bank of Japan has given no indication it will move away from its ultra-loose monetary policy, which continues to weigh on the yen.
Volatility and Risk Management Strategies
However, we must be mindful that the pair is in deeply overbought territory, increasing the risk of a sharp reversal. We vividly recall the Japanese Ministry of Finance’s currency interventions in late 2024 when the rate crossed the 152.00 threshold. To mitigate this risk, traders holding long positions should consider placing a stop-loss or buying protective put options near the 150.90 support level mentioned.
The potential for a test of highs followed by a “sizeable pullback” suggests volatility may increase. A long strangle strategy, which involves buying an out-of-the-money call and an out-of-the-money put, could be effective. This position would profit from a significant price move in either direction, whether it’s a break above 153.80 or a sharp, intervention-driven drop.
