🔍 Chart Overview: EUR/JPY – Daily Timeframe
This chart illustrates the price action of the Euro against the Japanese Yen and highlights a Falling Wedge Pattern developing over several months. This is a classic bullish continuation/reversal setup, supported by key technical levels.
📐 1. Chart Pattern: Falling Wedge
A falling wedge is a bullish chart pattern that occurs when the market consolidates between two downward-sloping trendlines.
Characteristics Seen in the Chart:
Converging Trendlines: The upper (resistance) and lower (support) boundaries are both sloping downward, indicating a narrowing price range.
Volume (not shown) usually decreases during the formation, followed by a surge on breakout.
Multiple Touch Points: The price action respects both boundaries multiple times, confirming the pattern's validity.
🏛️ 2. Key Levels
✅ Support Level (Demand Zone):
Marked around 156.000 – 158.000
Multiple bounces from this area, indicating strong buying interest.
Aligned with the lower wedge trendline and historical price reaction zones.
🚫 Resistance Level (Supply Zone / Breakout Zone):
Around 164.500 – 166.000
Price repeatedly failed to break this level, confirming it as a strong supply area.
Confluence of horizontal resistance and the upper wedge boundary.
📊 3. Trade Setup
💼 Entry Strategy:
Confirmation Buy: Enter a long position upon a daily candle close above the wedge resistance (around 166.000).
Aggressive traders may consider an earlier entry near the wedge’s support with a tight stop.
🎯 Target:
The projected target is 172.962, calculated based on the height of the wedge pattern added to the breakout point.
This aligns with a previous swing high area, serving as a logical profit-taking zone.
🛑 Stop Loss:
Positioned at 155.576, just below the key support zone.
This allows the trade room to breathe while protecting against a full pattern failure.
⚖️ 4. Risk Management
Risk-to-Reward Ratio (RRR): Target around 172.962 and Stop Loss at 155.576 offer a favorable RRR of approximately 2.5:1 or more, depending on entry.
Position Sizing: Use appropriate lot size based on your account risk tolerance (e.g., 1-2% of equity per trade).
📅 5. Timeframe Outlook
Medium to Long-Term Setup: Since this is a daily chart, the trade may take weeks to months to fully play out.
Patience and proper trade management are essential.
🔎 6. Additional Notes
Retest Opportunity: If price breaks out, look for a retest of the resistance zone as new support before continuation to the upside.
Fundamental Factors: Keep an eye on EUR and JPY economic data, ECB and BoJ policy announcements, and global risk sentiment, which can influence the pair.
🧭 Professional Takeaway
This is a textbook bullish falling wedge pattern within a well-defined technical structure. The chart provides:
A clear pattern breakout level,
Strong historical support/resistance zones,
A defined risk management plan,
And a realistic price target based on technical projection.
If you are a swing trader or position trader, this setup offers a high-probability opportunity with favorable risk-reward dynamics—provided a breakout is confirmed.
This chart illustrates the price action of the Euro against the Japanese Yen and highlights a Falling Wedge Pattern developing over several months. This is a classic bullish continuation/reversal setup, supported by key technical levels.
📐 1. Chart Pattern: Falling Wedge
A falling wedge is a bullish chart pattern that occurs when the market consolidates between two downward-sloping trendlines.
Characteristics Seen in the Chart:
Converging Trendlines: The upper (resistance) and lower (support) boundaries are both sloping downward, indicating a narrowing price range.
Volume (not shown) usually decreases during the formation, followed by a surge on breakout.
Multiple Touch Points: The price action respects both boundaries multiple times, confirming the pattern's validity.
🏛️ 2. Key Levels
✅ Support Level (Demand Zone):
Marked around 156.000 – 158.000
Multiple bounces from this area, indicating strong buying interest.
Aligned with the lower wedge trendline and historical price reaction zones.
🚫 Resistance Level (Supply Zone / Breakout Zone):
Around 164.500 – 166.000
Price repeatedly failed to break this level, confirming it as a strong supply area.
Confluence of horizontal resistance and the upper wedge boundary.
📊 3. Trade Setup
💼 Entry Strategy:
Confirmation Buy: Enter a long position upon a daily candle close above the wedge resistance (around 166.000).
Aggressive traders may consider an earlier entry near the wedge’s support with a tight stop.
🎯 Target:
The projected target is 172.962, calculated based on the height of the wedge pattern added to the breakout point.
This aligns with a previous swing high area, serving as a logical profit-taking zone.
🛑 Stop Loss:
Positioned at 155.576, just below the key support zone.
This allows the trade room to breathe while protecting against a full pattern failure.
⚖️ 4. Risk Management
Risk-to-Reward Ratio (RRR): Target around 172.962 and Stop Loss at 155.576 offer a favorable RRR of approximately 2.5:1 or more, depending on entry.
Position Sizing: Use appropriate lot size based on your account risk tolerance (e.g., 1-2% of equity per trade).
📅 5. Timeframe Outlook
Medium to Long-Term Setup: Since this is a daily chart, the trade may take weeks to months to fully play out.
Patience and proper trade management are essential.
🔎 6. Additional Notes
Retest Opportunity: If price breaks out, look for a retest of the resistance zone as new support before continuation to the upside.
Fundamental Factors: Keep an eye on EUR and JPY economic data, ECB and BoJ policy announcements, and global risk sentiment, which can influence the pair.
🧭 Professional Takeaway
This is a textbook bullish falling wedge pattern within a well-defined technical structure. The chart provides:
A clear pattern breakout level,
Strong historical support/resistance zones,
A defined risk management plan,
And a realistic price target based on technical projection.
If you are a swing trader or position trader, this setup offers a high-probability opportunity with favorable risk-reward dynamics—provided a breakout is confirmed.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.