USD/JPY outlook: Penetration of falling 4-hr and daily cloud bases to open way for stronger short squeeze
Strong bounce on Tuesday is generating initial reversal signal on daily chart and warning of potential stronger short squeeze, as the pair is on track to dent the recent downtrend on daily close above the latest lower top (144.11).
Fresh bulls pressure strong barriers at 144.61/70 (Fibo 38.2% of 148.64/142.11 / base of falling thick 4-hr cloud) break of which to validate positive signal and open way for further advance towards 145.10 (descending daily cloud base) and 145.38 (50% retracement).
Improving technical picture on 14-d momentum diverging from the border of negative territory and stochastic out from oversold territory) contribute to positive signals, however, upside prospects will be limited as long as the price remains capped by falling clouds (4-hr and daily).
Res: 144.61; 144.70; 145.10; 145.38
Sup: 144.00; 143.65; 143.07; 142.35
Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
