USDJPY – decisive break above the daily cloud top strengthens the bullish outlook, with a bear-trap fueling the recovery

USDJPY regained momentum, bouncing near Thursday’s one-week high after the Bank of Japan kept rates unchanged but signaled the possibility of earlier-than-expected hikes, which briefly strengthened the yen.

The sharp rebound over the past two sessions was largely driven by the Federal Reserve’s projections for 2026, which turned out less dovish than markets had anticipated.

Wednesday’s bullish candle with a long lower shadow highlighted volatile post-FOMC trading, showing strong downside rejection and a bear-trap formation under the 100DMA, providing an encouraging technical signal.

The fresh advance pushed the pair back into the daily Ichimoku cloud, climbing through the entire span between 146.72 and 147.87 before probing above the cloud top on Friday.

A decisive close above the cloud top is needed to reinforce the positive near-term outlook, with a break above the nearby Fibonacci barrier at 148.20 (50% retracement of 150.91/145.47) expected to confirm the signal and open the way towards 148.58 (200DMA), 148.84 (61.8% retracement), and 149.13 (September 3 high).

Daily indicators remain bullishly aligned but require further strengthening to more firmly underpin the move.

Failure to secure a clear break above the daily cloud top may pause the bullish momentum, though the bias will stay higher while holding above the 55DMA and broken 38.2% retracement at 147.56.

Res: 147.87; 148.20 148.58; 148.84
Sup: 147.56; 147.19;146.72; 146.23