USD/JPY rebounds but not out of the woods yet

• USDJPY pauses meltdown near 2023–2024 base.

• Bulls act but stronger efforts are needed above 144.20.

USDJPY rebounded just above September’s low of 139.56, climbing as high as 143.56 on Wednesday.

Having formed two strong bullish candlesticks at the bottom of its recent meltdown, and with technical indicators emerging from oversold levels, the pair may push for more gains in the short term.

However, the path higher may be rocky. The 20-day exponential moving average (EMA) and the broken support trendline – both located in the 144.00–144.40 region – could quickly stall any upward momentum. Then, the 145.50 barrier may prevent an extension towards the 50-day EMA and the 38.2% Fibonacci retracement of the 2025 downtrend at 147.20. If the rally continues beyond the tentative resistance trendline at 147.85, the next target could be the 50% Fibonacci mark of 149.40 and the 200-day EMA at 150.00.

In the negative scenario, where current selling pressures persist, attention will shift back to the 140.00 round level and the support line at 139.30. The 138.00 restrictive zone, which capped both upside and downside moves between December 2022 and July 2023, could keep the bears busy, delaying a freefall toward the 134.65–135.00 area.

To sum up, USDJPY pivoted after testing a familiar support area, but it's not out of the woods yet, as key obstacles still lie ahead – starting with the 144.20 region – which is likely to come under immediate scrutiny.