USD/JPY – Breakthrough of 4-Hour and Daily Ichimoku Cloud Bases Signals Potential for Deeper Short Squeeze

A strong rebound on Tuesday is signaling an initial trend reversal on the daily chart and suggests the potential for a deeper short squeeze. The pair is poised to challenge the recent downtrend, especially if it secures a daily close above the most recent lower high at 144.11.

Fresh bullish momentum is now testing key resistance at 144.61/70 — the 38.2% Fibonacci retracement of the 148.64–142.11 decline and the base of the descending 4-hour Ichimoku cloud. A decisive break above this zone would confirm the bullish reversal and pave the way for further gains toward 145.10 (base of the falling daily cloud) and 145.38 (50% Fibonacci level).

Technical indicators support this scenario: 14-day momentum is diverging upward from the edge of negative territory, and the stochastic oscillator has exited oversold conditions. However, upside potential may remain limited unless the price can clearly break through the falling 4-hour and daily Ichimoku clouds.

Res: 144.61; 144.70; 145.10; 145.38
Sup: 144.00; 143.65; 143.07; 142.35