EUR/JPY 45-Minute Chart — Advanced Technical Analysis
Pattern: Falling Wedge Breakout with Retest Opportunity
📈 I. Technical Pattern Analysis: Falling Wedge
The EUR/JPY pair has formed a textbook falling wedge pattern, which is typically a bullish reversal or continuation pattern, depending on where it forms within the trend structure. In this case, the falling wedge appears after a strong bullish impulse, suggesting a bullish continuation.
🔍 Key Characteristics of the Wedge:
The price made lower highs and lower lows within two converging downward sloping trendlines.
There was a visible slowdown in bearish momentum, indicating seller exhaustion.
A decisive breakout occurred at the upper resistance line of the wedge, confirming the pattern's validity.
This breakout was accompanied by strong bullish momentum, suggesting institutional interest or high-impact event-driven participation.
🟨 II. Market Structure and Price Behavior
After breaking out of the falling wedge:
The price reached a key horizontal resistance zone around 162.753, where it paused.
A potential pullback/retest scenario is now in play, with price expected to return to the former resistance (now acting as support) before continuing the bullish move.
This pullback is not a sign of weakness, but rather a healthy retracement that offers a second entry opportunity for disciplined traders.
🧠 III. Trade Psychology Behind the Pattern
Understanding market sentiment here is crucial:
Inside the wedge, sellers dominated, but each move downward became smaller, showing weakening control.
As the wedge narrowed, buyers quietly accumulated positions, waiting for the breakout.
Post-breakout, early buyers may take profit, causing the price to dip slightly (the pullback).
New buyers (or breakout traders) typically enter at the retest, forming the next leg up in the rally.
This aligns with Wyckoff's principle of accumulation → markup → re-accumulation.
🔵 IV. Support & Resistance Zones (Key Price Levels)
Zone Level Role
Support 161.819 Major swing low & SL level
Retest Zone ~162.20–162.30 Prior resistance turned support
TP Zone 1 162.753 First resistance; key price reaction zone
TP Zone 2 / Final Target 163.242 Previous swing high and measured wedge target
📌 V. Trade Setup: Strategy Details
This setup uses structure-based trading with confirmation:
Entry: Upon bullish confirmation at or near 162.20–162.30 (prior resistance turned support).
Stop Loss (SL): 161.819, just below the wedge base and support.
Take Profit (TP1): 162.753 — short-term target aligned with previous resistance.
Final Target (TP2): 163.242 — projected move from the wedge’s depth.
This setup offers an excellent risk-to-reward ratio (R:R) of approximately 1:2 or better depending on the entry point.
🧩 VI. Broader Implications & Confluences
The Falling Wedge breakout is aligned with a strong prior uptrend, making this a continuation trade.
The chart also respects key horizontal support/resistance zones, adding price structure confluence to the pattern.
This setup can be further validated using RSI or MACD divergence (not shown here), which often align with wedge breakouts.
🔐 VII. Risk Management & Trade Discipline
Wait for confirmation on the pullback. Avoid entering impulsively.
Use position sizing according to your trading plan — never risk more than 1–2% of capital per trade.
Consider scaling out of positions at TP1 and holding partial positions for extended moves toward TP2.
📈 Final Thoughts: Professional Take
This chart setup reflects a high-probability trade based on:
A clearly defined technical pattern (falling wedge)
Momentum confirmation through breakout
Clean horizontal levels for TP and SL
A logical retest of former resistance as support
Such setups often occur before major trend continuations and should be part of every price-action trader’s playbook.
Pattern: Falling Wedge Breakout with Retest Opportunity
📈 I. Technical Pattern Analysis: Falling Wedge
The EUR/JPY pair has formed a textbook falling wedge pattern, which is typically a bullish reversal or continuation pattern, depending on where it forms within the trend structure. In this case, the falling wedge appears after a strong bullish impulse, suggesting a bullish continuation.
🔍 Key Characteristics of the Wedge:
The price made lower highs and lower lows within two converging downward sloping trendlines.
There was a visible slowdown in bearish momentum, indicating seller exhaustion.
A decisive breakout occurred at the upper resistance line of the wedge, confirming the pattern's validity.
This breakout was accompanied by strong bullish momentum, suggesting institutional interest or high-impact event-driven participation.
🟨 II. Market Structure and Price Behavior
After breaking out of the falling wedge:
The price reached a key horizontal resistance zone around 162.753, where it paused.
A potential pullback/retest scenario is now in play, with price expected to return to the former resistance (now acting as support) before continuing the bullish move.
This pullback is not a sign of weakness, but rather a healthy retracement that offers a second entry opportunity for disciplined traders.
🧠 III. Trade Psychology Behind the Pattern
Understanding market sentiment here is crucial:
Inside the wedge, sellers dominated, but each move downward became smaller, showing weakening control.
As the wedge narrowed, buyers quietly accumulated positions, waiting for the breakout.
Post-breakout, early buyers may take profit, causing the price to dip slightly (the pullback).
New buyers (or breakout traders) typically enter at the retest, forming the next leg up in the rally.
This aligns with Wyckoff's principle of accumulation → markup → re-accumulation.
🔵 IV. Support & Resistance Zones (Key Price Levels)
Zone Level Role
Support 161.819 Major swing low & SL level
Retest Zone ~162.20–162.30 Prior resistance turned support
TP Zone 1 162.753 First resistance; key price reaction zone
TP Zone 2 / Final Target 163.242 Previous swing high and measured wedge target
📌 V. Trade Setup: Strategy Details
This setup uses structure-based trading with confirmation:
Entry: Upon bullish confirmation at or near 162.20–162.30 (prior resistance turned support).
Stop Loss (SL): 161.819, just below the wedge base and support.
Take Profit (TP1): 162.753 — short-term target aligned with previous resistance.
Final Target (TP2): 163.242 — projected move from the wedge’s depth.
This setup offers an excellent risk-to-reward ratio (R:R) of approximately 1:2 or better depending on the entry point.
🧩 VI. Broader Implications & Confluences
The Falling Wedge breakout is aligned with a strong prior uptrend, making this a continuation trade.
The chart also respects key horizontal support/resistance zones, adding price structure confluence to the pattern.
This setup can be further validated using RSI or MACD divergence (not shown here), which often align with wedge breakouts.
🔐 VII. Risk Management & Trade Discipline
Wait for confirmation on the pullback. Avoid entering impulsively.
Use position sizing according to your trading plan — never risk more than 1–2% of capital per trade.
Consider scaling out of positions at TP1 and holding partial positions for extended moves toward TP2.
📈 Final Thoughts: Professional Take
This chart setup reflects a high-probability trade based on:
A clearly defined technical pattern (falling wedge)
Momentum confirmation through breakout
Clean horizontal levels for TP and SL
A logical retest of former resistance as support
Such setups often occur before major trend continuations and should be part of every price-action trader’s playbook.
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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.