This chart represents the JPY/USD (Japanese Yen vs. US Dollar) on a daily timeframe (1D), published on April 3, 2025, via TradingView. The price action and technical indicators suggest a bearish outlook based on the formation of a Rising Wedge Pattern, a classic reversal structure signaling potential price depreciation.
1. Chart Structure & Identified Patterns
A. Rising Wedge Formation (Bearish Reversal Pattern)
The price has been moving in an uptrend, forming higher highs (HH) and higher lows (HL).
The two converging black trendlines indicate a rising wedge, a pattern that typically precedes a downside breakout.
A rising wedge is considered a bearish signal, especially when formed after a strong rally.
B. Support and Resistance Levels
Resistance Zone (Highlighted in Beige, Upper Range)
This level represents a historically significant supply area where selling pressure is expected.
Price action shows multiple rejections at this level, indicating the presence of strong resistance.
The red downward arrow further confirms that this level is acting as a cap on price movement.
Support Zone (Highlighted in Beige, Lower Range)
This area previously served as a strong demand level, where buyers stepped in, reversing the price.
The green upward arrow suggests that it played a critical role in the prior bullish move.
C. Key Price Levels
All-Time High (ATH) Marked at ~0.007155
This represents the historical peak price, which serves as a potential long-term resistance.
Stop-Loss Placement (~0.006959)
This is placed above the resistance level to manage risk in case of a false breakout.
Target Level (~0.006178)
Based on the wedge height, this level is calculated as the measured move after a breakdown.
2. Price Action & Market Sentiment
A. Recent Bullish Move
The market has been in a strong uptrend since hitting the support zone.
This move was characterized by higher lows and higher highs, reinforcing bullish momentum.
However, momentum appears to be weakening as the price struggles to break through the resistance.
B. Confirmation of a Bearish Reversal
The price has touched the upper resistance zone multiple times but failed to break through.
The trendline breakdown (expected move) suggests sellers are stepping in.
A lower high formation is seen as an early warning of a reversal.
3. Trade Setup: Short Position Strategy
This setup aligns with the principles of technical analysis, utilizing the Rising Wedge as a bearish reversal pattern.
A. Entry Strategy
Sell Entry Trigger: Enter a short trade upon a confirmed breakdown below the lower trendline.
Retest Confirmation: Ideally, wait for a pullback to the broken trendline before shorting to avoid false signals.
B. Risk Management
Stop-Loss Placement: Above the resistance zone at 0.006959, to protect against an invalidation.
Take-Profit Target: Set at 0.006178, calculated based on the wedge’s height projection.
C. Reward-to-Risk Ratio (RRR)
RRR = 2:1 or higher
The target level offers a risk-reward ratio that justifies the trade setup.
4. Summary & Final Outlook
Bearish Signals:
✅ Rising Wedge Pattern – A strong reversal indicator.
✅ Lower Highs and Weak Momentum – Suggests selling pressure.
✅ Failure to Break Resistance – Indicates bullish exhaustion.
✅ Projected Target Based on Wedge – Price expected to reach 0.006178.
Neutral Considerations:
If price does not break the lower trendline, the pattern is not validated.
If a false breakdown occurs, prices may briefly recover before falling.
Bullish Invalidation:
If the price breaks above 0.006959 and sustains above resistance, the bearish setup is invalidated.
Final Verdict:
📉 Bearish Bias – The market setup favors a downside move upon a confirmed breakdown.
🎯 Target: 0.006178 (Key support level).
⚠️ Risk: If the price does not break lower, consolidation may occur before a clearer move.
1. Chart Structure & Identified Patterns
A. Rising Wedge Formation (Bearish Reversal Pattern)
The price has been moving in an uptrend, forming higher highs (HH) and higher lows (HL).
The two converging black trendlines indicate a rising wedge, a pattern that typically precedes a downside breakout.
A rising wedge is considered a bearish signal, especially when formed after a strong rally.
B. Support and Resistance Levels
Resistance Zone (Highlighted in Beige, Upper Range)
This level represents a historically significant supply area where selling pressure is expected.
Price action shows multiple rejections at this level, indicating the presence of strong resistance.
The red downward arrow further confirms that this level is acting as a cap on price movement.
Support Zone (Highlighted in Beige, Lower Range)
This area previously served as a strong demand level, where buyers stepped in, reversing the price.
The green upward arrow suggests that it played a critical role in the prior bullish move.
C. Key Price Levels
All-Time High (ATH) Marked at ~0.007155
This represents the historical peak price, which serves as a potential long-term resistance.
Stop-Loss Placement (~0.006959)
This is placed above the resistance level to manage risk in case of a false breakout.
Target Level (~0.006178)
Based on the wedge height, this level is calculated as the measured move after a breakdown.
2. Price Action & Market Sentiment
A. Recent Bullish Move
The market has been in a strong uptrend since hitting the support zone.
This move was characterized by higher lows and higher highs, reinforcing bullish momentum.
However, momentum appears to be weakening as the price struggles to break through the resistance.
B. Confirmation of a Bearish Reversal
The price has touched the upper resistance zone multiple times but failed to break through.
The trendline breakdown (expected move) suggests sellers are stepping in.
A lower high formation is seen as an early warning of a reversal.
3. Trade Setup: Short Position Strategy
This setup aligns with the principles of technical analysis, utilizing the Rising Wedge as a bearish reversal pattern.
A. Entry Strategy
Sell Entry Trigger: Enter a short trade upon a confirmed breakdown below the lower trendline.
Retest Confirmation: Ideally, wait for a pullback to the broken trendline before shorting to avoid false signals.
B. Risk Management
Stop-Loss Placement: Above the resistance zone at 0.006959, to protect against an invalidation.
Take-Profit Target: Set at 0.006178, calculated based on the wedge’s height projection.
C. Reward-to-Risk Ratio (RRR)
RRR = 2:1 or higher
The target level offers a risk-reward ratio that justifies the trade setup.
4. Summary & Final Outlook
Bearish Signals:
✅ Rising Wedge Pattern – A strong reversal indicator.
✅ Lower Highs and Weak Momentum – Suggests selling pressure.
✅ Failure to Break Resistance – Indicates bullish exhaustion.
✅ Projected Target Based on Wedge – Price expected to reach 0.006178.
Neutral Considerations:
If price does not break the lower trendline, the pattern is not validated.
If a false breakdown occurs, prices may briefly recover before falling.
Bullish Invalidation:
If the price breaks above 0.006959 and sustains above resistance, the bearish setup is invalidated.
Final Verdict:
📉 Bearish Bias – The market setup favors a downside move upon a confirmed breakdown.
🎯 Target: 0.006178 (Key support level).
⚠️ Risk: If the price does not break lower, consolidation may occur before a clearer move.
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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.