USDJPY → Descending Wedge Bullish Pattern! Should We Long Here?USDJPY is forming a descending wedge pattern signaling bullish sentiment and setting us up for a long position. Are we in a position to short now?
How do we trade this? 🤔
We have the wicks! But we need confirmation. We've had three pushes down that include two large wicks and some nice bullish price action that followed. What we need now is a push and a close above the Daily 30EMA to confirm the move up. These conditions will give us enough probability to enter a long.
I'm playing this trade conservatively because we do have a few items working against us:
1. Lack of a Higher High
2. The Former Support Zone could act as a resistance
3. The Daily 200EMA is right above that former Support Zone (now Resistance).
That being said, we have a setup for a long scalp and if we size our position properly, this is a good opportunity to grab some market movement.
💡 Trade Idea 💡
Long Entry: 142.200
🟥 Stop Loss: 140.000
✅ Take Profit: 144.400
⚖️ Risk/Reward Ratio: 1:1
🔑 Key Takeaways 🔑
1. Descending Wedge after Extensive Bear Run. Bias to Long.
2. Last three touches of Support had Strong Wicks. Bias to Long.
3. Look for break above 30EMA followed by Test of Support.
4. Enter 1:1 Long Scalp with Confirmation
5. RSI at 41.00 and above Moving Average. Bias to Long.
💰 Trading Tip 💰
Descending Wedges signal an increased probability of a trend reversal. Combined with strong buy bars (candles with large wicks on the bottom), creates conditions where a reversal trade is reasonable.
⚠️ 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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