Synopsis:

Bank of America sees a constructive technical setup for USD/JPY, with the potential for a rebound toward the 150–152 “cloud” zone, barring further macro/geopolitical shocks. The bank remains skeptical of a deeper bearish reversal despite recent declines.

Key Points:

• Wave “c” May Be Complete:
  BofA had previously expected a deeper correction, but now suggests the decline may have ended in the 142s, with strong support in the 140–143 zone.

• Head and Shoulders Top Unlikely:
  They are skeptical of the head-and-shoulders bearish case, citing:

  1. Right shoulder high was above the left.

  2. Neckline still unbroken—bears must prove themselves.

  3. The correction fits better as a shallow primary wave IV.

  4. MACD turning bullish, signaling upward momentum.

• Target Rebound Zone:
  If macroeconomic risks (e.g., Middle East escalation or Fed surprise) don’t resurface, they expect USD/JPY to retest the Ichimoku cloud in the 150–152 area.

• Downside Risks Remain:
  A break below 140 in USD/JPY or 1200 in BBDXY would expose risk toward 135 or even 131, in line with deeper correction targets.

Conclusion:

While bearish risks haven’t vanished, BofA leans toward a technical rebound in USD/JPY, targeting 150–152, especially as MACD signals a possible shift and key support holds. The bullish case strengthens if macro tensions subside and BBDXY finds support.