The US Dollar (USD) is poised to retest the 148.55 level against the Japanese Yen (JPY), with a sustained break below this level appearing unlikely. The longer-term outlook suggests that USD weakness has not yet stabilised, with a slower pace of decline expected.

In recent trading, the USD rebounded from a low of 148.63 to a high of 150.30 before falling sharply to 148.56. As long as the resistance at 149.70 is not breached, there remains a chance for another attempt at the 148.55 level, while the next support level to monitor is 147.70.

What we are seeing here is a market that appears hesitant to commit fully to a direction. There’s been a pullback, but the overall trend of weakness hasn’t fully run its course. The drop from 150.30 down to 148.56 suggests that sellers are still active, but the fact that the price stopped just above 148.55 indicates strong buying interest in that area.

Joshua pointed out that unless 149.70 is cleared, the expectation of another dip towards 148.55 remains valid. That means traders should be cautious about assuming a lasting recovery until that level is convincingly breached. A failure to break higher would likely lead to another test of support. The next level we are watching sits at 147.70, which would come into focus if downward pressure builds further.

Karen’s assessment that the USD’s broader weakening trend is not yet over remains key. However, she also noted that the rate of decline appears to be levelling off somewhat. That translates into choppy price action where traders should be prepared for abrupt moves in both directions.

For those watching derivatives, this setup suggests a mix of patience and vigilance is needed. Option pricing is likely to reflect higher implied volatility while traders adjust to the shifting momentum. A drop beneath 148.55 could accelerate selling, but unless that happens, expecting a gradual decline rather than a rapid selloff seems more in line with recent behaviour.

As we navigate the coming sessions, keeping an eye on how price reacts around 149.70 on the upside and 148.55 on the downside will be essential. If either of those levels breaks convincingly, it may provide a clearer signal about which side is gaining control. Until then, preparing for short bursts of movement rather than extended trends seems the most reasonable approach.