JPY/USD (Japanese Yen vs US Dollar) | 45-Min Chart Analysis — Falling Wedge Breakout
🔹 1. Pattern Recognition: Falling Wedge Formation
The Falling Wedge is a bullish reversal pattern that forms when the price is making lower highs and lower lows but the pace of the decline slows, resulting in converging trendlines.
In this case:
The price action from April 22 onward has respected two downward-sloping trendlines —
Upper Trendline (Resistance): Lower highs are connected, forming the resistance line.
Lower Trendline (Support): Lower lows are connected, forming the support boundary.
As the wedge tightens, it shows that sellers are losing momentum, creating conditions for buyers to step back in and drive a bullish breakout.
📌 Important Details Noticed:
Clear contraction of volatility inside the wedge.
Multiple clean touches on both support and resistance trendlines strengthen pattern reliability.
Volume (not shown) typically dries up during wedge formation and increases significantly on breakout — standard price behavior.
🔹 2. Key Levels and Market Structure
Support Zone:
Around 0.006920–0.006930.
This zone has been tested multiple times and held firm, showing strong buyer interest.
Immediate Resistance:
Around 0.007005, aligned with the minor structural swing highs.
Price action is expected to react at this zone after breakout.
Primary Target Zone:
0.007043 — projected from the wedge height measurement (the distance between the initial high and low of the wedge, then projected from breakout point).
This establishes a logical and structured trading pathway post-breakout.
🔹 3. Trade Execution Plan
Entry Criteria:
Enter a long trade after a confirmed breakout (candle closing above the wedge resistance line).
Ideal confirmation: breakout + minor retest (support flip).
Take-Profit (TP) Zones:
TP1: 0.007005 (resistance zone / psychological level).
TP2 (Final Target): 0.007043 (measured move target).
Stop-Loss (SL) Placement:
Below 0.006913, under the wedge support and last swing low.
Ensures the trade is protected against fake breakouts (false moves).
Risk-Reward Setup:
Favorable setup offering at least 1:2 or better reward-to-risk ratio.
Risk small relative to expected upside, aligning with professional trading standards.
🔹 4. Expected Price Path
The forecasted movement is:
Breakout above wedge resistance.
Potential minor retest of broken resistance (now support).
Continuation toward TP1 (0.007005).
After reaching TP1, slight retracement possible before continuation toward TP2 (0.007043).
This pathway maps the most probable price action based on pattern behavior and price memory at previous support/resistance zones.
🔹 5. Broader Context & Fundamentals
While the chart focuses on technicals, it's crucial to integrate a basic macro overview:
JPY is a traditional safe-haven currency. When risk sentiment is strong globally, JPY tends to weaken.
USD strength/weakness is currently highly sensitive to:
Interest rate expectations (Federal Reserve policy).
Inflation data releases (like CPI or PCE).
Risk sentiment in equity and bond markets.
A dovish Fed tone or strong risk appetite (stock market rallies) could favor a bullish breakout here.
Conversely, unexpected safe-haven demand could create volatility but won't invalidate the pattern unless SL is hit.
🔹 6. Risk Management and Trade Psychology
Professional traders know:
No setup is 100% guaranteed — even beautiful wedges can fail.
Thus:
Risk only 1%-2% of trading capital per trade.
Stick to the plan — exit if SL is hit, no emotional reactions.
Partial profit-taking at TP1 is a smart way to lock gains and reduce exposure.
Also, monitor high-impact news events on the economic calendar that can create sudden volatility affecting the trade.
📋 Summary of Trading Setup:
Aspect Details
Pattern Falling Wedge (Bullish Reversal)
Timeframe 45-Minute Chart
Entry Trigger Breakout and close above resistance
TP1 0.007005
TP2 (Final Target) 0.007043
SL Below 0.006913
Risk-Reward Minimum 1:2
Bias Bullish Post-Breakout
🏁 Conclusion:
This JPY/USD setup offers a textbook-quality opportunity for traders who value clean technical patterns, clear risk/reward structure, and disciplined execution.
The Falling Wedge is one of the most reliable reversal patterns when breakout confirmation is handled professionally.
Patience is key: wait for the breakout and confirmation.
Manage risk properly.
Stay updated on macroeconomic events.
Let the market come to you.
✅ Setup Status: High Probability but Awaiting Breakout Confirmation.
🔹 1. Pattern Recognition: Falling Wedge Formation
The Falling Wedge is a bullish reversal pattern that forms when the price is making lower highs and lower lows but the pace of the decline slows, resulting in converging trendlines.
In this case:
The price action from April 22 onward has respected two downward-sloping trendlines —
Upper Trendline (Resistance): Lower highs are connected, forming the resistance line.
Lower Trendline (Support): Lower lows are connected, forming the support boundary.
As the wedge tightens, it shows that sellers are losing momentum, creating conditions for buyers to step back in and drive a bullish breakout.
📌 Important Details Noticed:
Clear contraction of volatility inside the wedge.
Multiple clean touches on both support and resistance trendlines strengthen pattern reliability.
Volume (not shown) typically dries up during wedge formation and increases significantly on breakout — standard price behavior.
🔹 2. Key Levels and Market Structure
Support Zone:
Around 0.006920–0.006930.
This zone has been tested multiple times and held firm, showing strong buyer interest.
Immediate Resistance:
Around 0.007005, aligned with the minor structural swing highs.
Price action is expected to react at this zone after breakout.
Primary Target Zone:
0.007043 — projected from the wedge height measurement (the distance between the initial high and low of the wedge, then projected from breakout point).
This establishes a logical and structured trading pathway post-breakout.
🔹 3. Trade Execution Plan
Entry Criteria:
Enter a long trade after a confirmed breakout (candle closing above the wedge resistance line).
Ideal confirmation: breakout + minor retest (support flip).
Take-Profit (TP) Zones:
TP1: 0.007005 (resistance zone / psychological level).
TP2 (Final Target): 0.007043 (measured move target).
Stop-Loss (SL) Placement:
Below 0.006913, under the wedge support and last swing low.
Ensures the trade is protected against fake breakouts (false moves).
Risk-Reward Setup:
Favorable setup offering at least 1:2 or better reward-to-risk ratio.
Risk small relative to expected upside, aligning with professional trading standards.
🔹 4. Expected Price Path
The forecasted movement is:
Breakout above wedge resistance.
Potential minor retest of broken resistance (now support).
Continuation toward TP1 (0.007005).
After reaching TP1, slight retracement possible before continuation toward TP2 (0.007043).
This pathway maps the most probable price action based on pattern behavior and price memory at previous support/resistance zones.
🔹 5. Broader Context & Fundamentals
While the chart focuses on technicals, it's crucial to integrate a basic macro overview:
JPY is a traditional safe-haven currency. When risk sentiment is strong globally, JPY tends to weaken.
USD strength/weakness is currently highly sensitive to:
Interest rate expectations (Federal Reserve policy).
Inflation data releases (like CPI or PCE).
Risk sentiment in equity and bond markets.
A dovish Fed tone or strong risk appetite (stock market rallies) could favor a bullish breakout here.
Conversely, unexpected safe-haven demand could create volatility but won't invalidate the pattern unless SL is hit.
🔹 6. Risk Management and Trade Psychology
Professional traders know:
No setup is 100% guaranteed — even beautiful wedges can fail.
Thus:
Risk only 1%-2% of trading capital per trade.
Stick to the plan — exit if SL is hit, no emotional reactions.
Partial profit-taking at TP1 is a smart way to lock gains and reduce exposure.
Also, monitor high-impact news events on the economic calendar that can create sudden volatility affecting the trade.
📋 Summary of Trading Setup:
Aspect Details
Pattern Falling Wedge (Bullish Reversal)
Timeframe 45-Minute Chart
Entry Trigger Breakout and close above resistance
TP1 0.007005
TP2 (Final Target) 0.007043
SL Below 0.006913
Risk-Reward Minimum 1:2
Bias Bullish Post-Breakout
🏁 Conclusion:
This JPY/USD setup offers a textbook-quality opportunity for traders who value clean technical patterns, clear risk/reward structure, and disciplined execution.
The Falling Wedge is one of the most reliable reversal patterns when breakout confirmation is handled professionally.
Patience is key: wait for the breakout and confirmation.
Manage risk properly.
Stay updated on macroeconomic events.
Let the market come to you.
✅ Setup Status: High Probability but Awaiting Breakout Confirmation.
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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.