JPYX → Bear Fakeout! Descending Wedge Bull Breakout! Now What?The Japanese Yen Index descending wedge pattern initially broke to the downside, the opposite expected move statistically. A double bottom formed shortly after and reversed hard to the upside! Now we're at the 200EMA Resistance, what are the next moves?
How do we trade this? 🤔
There are no good trades to take on the Daily chart. We're too close to resistance, RSI is over 75.00, and our protective stop for a long position would have to go back down at the breakout point, giving us terrible Risk/Reward. A long would not be ideal given this analysis. I would wait for the price to come back down to the Daily 30EMA and look for a buy signal and confirmation to enter a long.
Shorting on the other hand may be an option. Since we're near a resistance zone, a protective stop could be placed above the 200EMA and short to the 30EMA on the 4HR chart. The Macro Trend is bearish, so this would be the ideal direction to trade on the higher timeframes such as this one. I would use the 4HR chart to enter a short, and use the Daily chart to look for a long position.
💡 Trade Idea 💡
Long Entry: 763.0
🟥 Stop Loss: 756.5
✅ Take Profit: 776.0
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. Descending Wedge Patern, Bullish!
2. Breakout below Wedge failed!
3. Double-Bottom Reversal, broke out above wedge.
4. Resistance at 200EMA, Wait to Enter.
5. RSI at 75.00, wait for a pullback.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
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