JPY/USD Rising Wedge Breakdown – Bearish Reversal in Play🔎 Technical Breakdown:
1. Rising Wedge Formation:
The pair has been trading within a Rising Wedge, a bearish reversal pattern that forms when price makes higher highs and higher lows but with diminishing momentum. The wedge is visible from the swing low on May 13, where price began to climb aggressively but within increasingly narrow price action. This narrowing range signals weakening bullish strength.
2. Key Resistance Zone:
The wedge forms right below a Major Resistance Zone marked earlier in the chart (around 0.007050), where price had previously faced heavy selling pressure. This adds confluence to the bearish bias, as the zone historically acted as a turning point.
3. SR Interchange Zone:
Below the wedge lies a Support-turned-Resistance (SR) Interchange level, a critical price area where past support may now act as resistance if the price attempts to retrace. This is a commonly watched level by institutional and technical traders.
4. Breakdown Confirmation:
The price has broken below the wedge's lower trendline, which is often considered the breakdown signal. A valid breakdown typically includes a close outside the wedge body followed by a retest or continuation.
5. Bearish Target:
The projected move is toward 0.006796, derived by measuring the wedge height and applying it from the breakdown point. This level aligns with a historical support zone, adding more confluence to the target.
🧠 Psychological & Structural View:
Bullish exhaustion: Buyers pushed price higher into resistance, but momentum slowed, signaling exhaustion.
Trapped longs: Traders who entered late in the wedge may now be trapped, potentially accelerating a sell-off as they exit.
Smart money behavior: Rising wedges near resistance often signal distribution by smart money before a drop.
🛠️ Trading Plan Suggestion (Not Financial Advice):
Entry: After a clear wedge breakdown, consider short entries on a retest of the broken trendline or a bearish candle confirmation.
SL: Above the wedge high or major resistance zone.
TP: Staggered exits below 0.006850 and final target around 0.006796.
🔁 What to Watch For:
Retest of the wedge breakdown (potential short entry zone)
Momentum confirmation via volume or bearish candles
Price reaction at SR Interchange and final support target
🧠 Minds Section – Condensed Summary
JPY/USD formed a Rising Wedge below major resistance, signaling bullish exhaustion. Price has broken down from the wedge, confirming bearish momentum. A clean breakdown targets 0.006796, with SR interchange acting as a minor support. A retest of the wedge breakdown could offer a good short opportunity.
