USD/JPY Resilience
Since July, USD/JPY has fluctuated between its 100 and 200-day moving averages, temporarily surpassing 150.00 at the end of July. This indicates ongoing range-bound trading activity over the past months.
Market Strategy
We must watch the 100-day moving average at 145.90 with extreme focus, as a break below could trigger a much faster decline. Looking back at the interventions of 2022 and 2023, we know that Japanese officials become highly active in this zone, which could spark sudden and violent price swings. This memory suggests that using options to define risk is more prudent than trading spot FX directly.
For the next few weeks, buying put options with strike prices below 145.90 appears to be a viable strategy to capitalize on a potential breakdown. This offers a known, limited risk if the pair unexpectedly reverses higher. A bear put spread could also be considered to lower the initial cost while targeting a move toward the 144.00 level.
