USD/JPY Trade Idea: Bearish Reversal from Rising Wedge at Resistance
Timeframe: 30-Minute Chart
Pair: USD/JPY
Analysis Type: Technical – Price Action & Chart Pattern
🔍 Technical Overview
The chart illustrates a classic Rising Wedge pattern forming within a well-defined resistance zone after a period of range-bound price action and consolidation. The structure signals a potential bearish reversal, reinforced by confluence zones and historical price behavior.
🧱 Key Technical Elements
🔹 Resistance Zone (144.40–144.50)
Price has approached a previous strong resistance zone, marked by multiple rejections in the past.
This zone acts as a supply area, where sellers have historically stepped in, and we expect potential rejection here again.
🔹 Support Zone (~143.00–142.80)
Clearly defined horizontal support zone from prior consolidation and demand, acting as the primary target area.
This aligns with the measured move from the wedge breakdown.
🔹 Rising Wedge Pattern
A bearish reversal pattern is identified where price action tightens upward within converging trendlines.
The pattern is confirmed as price reaches resistance and slows momentum, indicating weakening bullish strength.
📈 Trade Setup Breakdown
✅ Entry Plan
Entry is triggered after a confirmed breakdown from the wedge support trendline and rejection from resistance.
The ideal confirmation would be a bearish engulfing or strong bearish candle closing below the lower wedge boundary.
🎯 Targets
TP1 – 143.466
A moderate target aligned with previous minor consolidation zone.
Final Target – 142.779
A strong horizontal support level, acting as a full breakdown target from the wedge.
🛑 Stop Loss
Placed above the most recent swing high and outside the wedge structure at 145.405.
This protects against a false breakout or continuation of the bullish trend.
🔁 Trade Rationale (Confluence Factors)
Bearish Rising Wedge at a major resistance level.
Low momentum breakout attempts near the wedge's apex suggest exhaustion.
Historical rejection at this price zone adds credibility to reversal expectations.
Price pattern projection aligns with the distance between wedge highs and lows—matching the target zones.
⚠️ Risk Management Note
Risk-to-reward (RRR) for this setup is favorable, approximately 1:2 or higher, depending on entry.
Always wait for a confirmed breakdown, as rising wedges can occasionally result in false moves if entered prematurely.
🧠 Conclusion
This setup reflects a high-probability short trade based on a well-formed rising wedge pattern, significant resistance confluence, and prior market structure. The clean breakdown and rejection scenario presents an excellent opportunity for short-term swing or intraday traders targeting the 143.466 and 142.779 levels.
Timeframe: 30-Minute Chart
Pair: USD/JPY
Analysis Type: Technical – Price Action & Chart Pattern
🔍 Technical Overview
The chart illustrates a classic Rising Wedge pattern forming within a well-defined resistance zone after a period of range-bound price action and consolidation. The structure signals a potential bearish reversal, reinforced by confluence zones and historical price behavior.
🧱 Key Technical Elements
🔹 Resistance Zone (144.40–144.50)
Price has approached a previous strong resistance zone, marked by multiple rejections in the past.
This zone acts as a supply area, where sellers have historically stepped in, and we expect potential rejection here again.
🔹 Support Zone (~143.00–142.80)
Clearly defined horizontal support zone from prior consolidation and demand, acting as the primary target area.
This aligns with the measured move from the wedge breakdown.
🔹 Rising Wedge Pattern
A bearish reversal pattern is identified where price action tightens upward within converging trendlines.
The pattern is confirmed as price reaches resistance and slows momentum, indicating weakening bullish strength.
📈 Trade Setup Breakdown
✅ Entry Plan
Entry is triggered after a confirmed breakdown from the wedge support trendline and rejection from resistance.
The ideal confirmation would be a bearish engulfing or strong bearish candle closing below the lower wedge boundary.
🎯 Targets
TP1 – 143.466
A moderate target aligned with previous minor consolidation zone.
Final Target – 142.779
A strong horizontal support level, acting as a full breakdown target from the wedge.
🛑 Stop Loss
Placed above the most recent swing high and outside the wedge structure at 145.405.
This protects against a false breakout or continuation of the bullish trend.
🔁 Trade Rationale (Confluence Factors)
Bearish Rising Wedge at a major resistance level.
Low momentum breakout attempts near the wedge's apex suggest exhaustion.
Historical rejection at this price zone adds credibility to reversal expectations.
Price pattern projection aligns with the distance between wedge highs and lows—matching the target zones.
⚠️ Risk Management Note
Risk-to-reward (RRR) for this setup is favorable, approximately 1:2 or higher, depending on entry.
Always wait for a confirmed breakdown, as rising wedges can occasionally result in false moves if entered prematurely.
🧠 Conclusion
This setup reflects a high-probability short trade based on a well-formed rising wedge pattern, significant resistance confluence, and prior market structure. The clean breakdown and rejection scenario presents an excellent opportunity for short-term swing or intraday traders targeting the 143.466 and 142.779 levels.
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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.