JPYUSD Technical Analysis – Falling Wedge Breakout | Bullish Reversal Trade Setup
🗓 Chart Overview
Pair: Japanese Yen / U.S. Dollar (JPYUSD)
Timeframe: 45-Minute Chart
Market Session: Consolidation phase after prolonged decline
Pattern Detected: Falling Wedge
Trading Bias: Bullish (Breakout Expected)
Type: Price Action Setup + Support/Resistance Confluence
🧩 Pattern Insight – Falling Wedge
The chart showcases a textbook Falling Wedge pattern, a classic bullish reversal formation typically seen after extended downtrends. The pattern is defined by two descending and converging trendlines—one acting as dynamic resistance and the other as support.
📌 Key Features of the Falling Wedge on This Chart:
Multiple Touches: The pattern has clear touches on both support and resistance lines, enhancing its reliability.
Volume Behavior: Though not shown here, falling wedges typically occur with declining volume, suggesting fading bearish momentum.
Breakout Point: The most recent low bounced directly from the wedge support, setting up a potential breakout above resistance.
Support Holding: The 0.006885 region has proven to be a solid demand zone, preventing further downside.
📐 Technical Levels & Price Zones
Level Price Role
Support 0.006885 Wedge base; structure low
Resistance 0.006964 Wedge upper boundary + retest area
Breakout Target 0.007031 Measured move target from wedge height
Stop Loss (SL) 0.006850 Safe zone below recent swing low
These levels form the foundation of the trading plan, with ideal entries and exits defined by technical confluence.
🎯 Trade Setup and Execution Plan
✅ Trade Plan:
Entry: Upon breakout and candle close above 0.006964, wait for a retest or enter immediately with momentum.
Stop Loss: Place below 0.006850 (under wedge support), allowing room for volatility without premature stop-out.
Take Profit: 0.007031 (just before next major resistance).
📊 Risk-Reward Profile:
Risk (SL): ~11.4 pips
Reward (TP): ~6.7 pips (if entering on breakout retest)
R:R Ratio: ~1.5–2.0 depending on entry
🔍 Market Psychology Breakdown
Seller Fatigue: As the wedge narrows, sellers lose momentum—highlighted by smaller candles and slower pushes downward.
Accumulation: Price action around the support zone indicates possible institutional accumulation before a bullish breakout.
Breakout Behavior: A strong bullish breakout typically follows when buyers gain control—especially after a third or fourth touch of wedge support.
Retail Trap: Many traders often short breakdowns too early in a wedge, providing liquidity for institutional buyers.
🧠 Strategic Takeaways
The Falling Wedge is a High-Probability Reversal Setup
When seen in a downtrend, it often marks the end of bearish dominance.
Confirmation Is Key
Don’t enter blindly—wait for a breakout with conviction or a retest showing bullish rejection.
Risk Management Is Non-Negotiable
Your SL should be well-placed below structural support to withstand volatility without exposing you to large losses.
📌 Summary
✅ Pattern Identified: Falling Wedge (Bullish Reversal)
✅ Bias: Long on Breakout
✅ Entry Point: Above 0.006964
✅ TP: 0.007031 (prior structure resistance)
✅ SL: Below 0.006850
✅ Rationale: Compression after decline, bullish divergence, clear wedge breakout potential
🗓 Chart Overview
Pair: Japanese Yen / U.S. Dollar (JPYUSD)
Timeframe: 45-Minute Chart
Market Session: Consolidation phase after prolonged decline
Pattern Detected: Falling Wedge
Trading Bias: Bullish (Breakout Expected)
Type: Price Action Setup + Support/Resistance Confluence
🧩 Pattern Insight – Falling Wedge
The chart showcases a textbook Falling Wedge pattern, a classic bullish reversal formation typically seen after extended downtrends. The pattern is defined by two descending and converging trendlines—one acting as dynamic resistance and the other as support.
📌 Key Features of the Falling Wedge on This Chart:
Multiple Touches: The pattern has clear touches on both support and resistance lines, enhancing its reliability.
Volume Behavior: Though not shown here, falling wedges typically occur with declining volume, suggesting fading bearish momentum.
Breakout Point: The most recent low bounced directly from the wedge support, setting up a potential breakout above resistance.
Support Holding: The 0.006885 region has proven to be a solid demand zone, preventing further downside.
📐 Technical Levels & Price Zones
Level Price Role
Support 0.006885 Wedge base; structure low
Resistance 0.006964 Wedge upper boundary + retest area
Breakout Target 0.007031 Measured move target from wedge height
Stop Loss (SL) 0.006850 Safe zone below recent swing low
These levels form the foundation of the trading plan, with ideal entries and exits defined by technical confluence.
🎯 Trade Setup and Execution Plan
✅ Trade Plan:
Entry: Upon breakout and candle close above 0.006964, wait for a retest or enter immediately with momentum.
Stop Loss: Place below 0.006850 (under wedge support), allowing room for volatility without premature stop-out.
Take Profit: 0.007031 (just before next major resistance).
📊 Risk-Reward Profile:
Risk (SL): ~11.4 pips
Reward (TP): ~6.7 pips (if entering on breakout retest)
R:R Ratio: ~1.5–2.0 depending on entry
🔍 Market Psychology Breakdown
Seller Fatigue: As the wedge narrows, sellers lose momentum—highlighted by smaller candles and slower pushes downward.
Accumulation: Price action around the support zone indicates possible institutional accumulation before a bullish breakout.
Breakout Behavior: A strong bullish breakout typically follows when buyers gain control—especially after a third or fourth touch of wedge support.
Retail Trap: Many traders often short breakdowns too early in a wedge, providing liquidity for institutional buyers.
🧠 Strategic Takeaways
The Falling Wedge is a High-Probability Reversal Setup
When seen in a downtrend, it often marks the end of bearish dominance.
Confirmation Is Key
Don’t enter blindly—wait for a breakout with conviction or a retest showing bullish rejection.
Risk Management Is Non-Negotiable
Your SL should be well-placed below structural support to withstand volatility without exposing you to large losses.
📌 Summary
✅ Pattern Identified: Falling Wedge (Bullish Reversal)
✅ Bias: Long on Breakout
✅ Entry Point: Above 0.006964
✅ TP: 0.007031 (prior structure resistance)
✅ SL: Below 0.006850
✅ Rationale: Compression after decline, bullish divergence, clear wedge breakout potential
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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.