The EUR/JPY 4-hour chart is presenting a well-structured price action setup, featuring a falling wedge breakout, a strong bullish trendline, and key resistance and support levels. This detailed analysis will walk through each aspect of the chart to provide a professional trading perspective.
1. Market Context & Price Action Overview
At the beginning of the chart, EUR/JPY was experiencing a downtrend, characterized by a series of lower highs and lower lows, forming a falling wedge pattern. This pattern is typically a bullish reversal signal, indicating that sellers are losing strength and buyers may take control.
Once the price reached a key support zone near 156.08, it bounced, leading to a breakout of the falling wedge. Since the breakout, the price has been moving in a bullish trend, forming higher highs and higher lows, respecting an ascending trendline.
2. Technical Patterns & Key Levels
🔹 Falling Wedge Pattern – Bullish Breakout
The falling wedge is identified by two converging trendlines sloping downward.
It indicates that bearish momentum is weakening as price compresses.
A breakout above the upper wedge line confirmed the shift in trend direction.
The breakout candle had strong bullish momentum, suggesting increased buyer interest.
🔹 Support and Resistance Levels
📉 Major Support Level (~156.08):
This level acted as a demand zone, where buyers aggressively stepped in.
The price formed multiple rejections at this level before breaking upwards.
A stop-loss placement below this level is ideal for bullish trades.
📈 Resistance Level (~163.50 - 164.00):
This zone has been tested multiple times as price approaches from below.
A break and retest of this resistance would confirm further bullish momentum.
If price faces strong rejection, a short-term pullback to the trendline may occur.
🎯 Final Target (~166.79):
This is the next major resistance level, aligning with previous swing highs.
It serves as a strong take-profit (TP) level for long positions.
If price reaches this level, we may see a consolidation phase or possible reversal.
3. Trend Analysis & Market Structure
📈 Bullish Trendline:
The price has been respecting an ascending trendline, acting as dynamic support.
This trendline connects higher lows, confirming a strong bullish trend.
As long as price stays above this line, buyers remain in control.
📊 Market Structure:
Since breaking out from the falling wedge, the price is forming a classic bullish structure of higher highs and higher lows.
This indicates sustained buyer pressure and a potential continuation toward resistance levels.
4. Trading Setup & Risk Management
📌 Entry Strategy:
Aggressive Entry: After the wedge breakout with a tight stop-loss.
Conservative Entry: Wait for a pullback to the trendline support or a break and retest of resistance at 163.50 - 164.00.
🔻 Stop Loss Placement:
Below 156.08 (previous support zone) to protect against trend invalidation.
Alternatively, below the rising trendline for a dynamic SL approach.
🎯 Take Profit Targets:
TP1: 163.50 - 164.00 resistance zone (Partial profits).
TP2: 166.79 final target, aligning with historical resistance.
5. Market Outlook & Potential Scenarios
✅ Bullish Scenario (High Probability)
If price holds above the trendline and breaks 163.50 - 164.00, we expect a continuation towards 166.79.
The structure remains intact as long as higher highs and higher lows persist.
❌ Bearish Scenario (Low Probability, but Possible)
If price fails at resistance and breaks below the trendline, it could signal a deeper retracement.
A break below 156.08 would completely invalidate the bullish setup, leading to a potential downtrend.
6. Summary & Key Takeaways
Trend Bias: Bullish, supported by a falling wedge breakout and higher highs.
Key Levels: Support at 156.08, resistance at 163.50 - 164.00, final target at 166.79.
Trading Strategy: Buy on retests of trendline or resistance breakouts.
Risk Management: Use dynamic stop-loss levels to minimize downside exposure.
🔹 Final Verdict:
If price remains above support and successfully breaks 163.50 - 164.00, a strong move toward 166.79 is expected. However, traders should remain cautious of trendline breakdowns and manage risk accordingly.
📊 Stay disciplined, follow your trading plan, and always use stop-loss protection! 🚀 #EURJPY #Forex #TradingStrategy #PriceAction
1. Market Context & Price Action Overview
At the beginning of the chart, EUR/JPY was experiencing a downtrend, characterized by a series of lower highs and lower lows, forming a falling wedge pattern. This pattern is typically a bullish reversal signal, indicating that sellers are losing strength and buyers may take control.
Once the price reached a key support zone near 156.08, it bounced, leading to a breakout of the falling wedge. Since the breakout, the price has been moving in a bullish trend, forming higher highs and higher lows, respecting an ascending trendline.
2. Technical Patterns & Key Levels
🔹 Falling Wedge Pattern – Bullish Breakout
The falling wedge is identified by two converging trendlines sloping downward.
It indicates that bearish momentum is weakening as price compresses.
A breakout above the upper wedge line confirmed the shift in trend direction.
The breakout candle had strong bullish momentum, suggesting increased buyer interest.
🔹 Support and Resistance Levels
📉 Major Support Level (~156.08):
This level acted as a demand zone, where buyers aggressively stepped in.
The price formed multiple rejections at this level before breaking upwards.
A stop-loss placement below this level is ideal for bullish trades.
📈 Resistance Level (~163.50 - 164.00):
This zone has been tested multiple times as price approaches from below.
A break and retest of this resistance would confirm further bullish momentum.
If price faces strong rejection, a short-term pullback to the trendline may occur.
🎯 Final Target (~166.79):
This is the next major resistance level, aligning with previous swing highs.
It serves as a strong take-profit (TP) level for long positions.
If price reaches this level, we may see a consolidation phase or possible reversal.
3. Trend Analysis & Market Structure
📈 Bullish Trendline:
The price has been respecting an ascending trendline, acting as dynamic support.
This trendline connects higher lows, confirming a strong bullish trend.
As long as price stays above this line, buyers remain in control.
📊 Market Structure:
Since breaking out from the falling wedge, the price is forming a classic bullish structure of higher highs and higher lows.
This indicates sustained buyer pressure and a potential continuation toward resistance levels.
4. Trading Setup & Risk Management
📌 Entry Strategy:
Aggressive Entry: After the wedge breakout with a tight stop-loss.
Conservative Entry: Wait for a pullback to the trendline support or a break and retest of resistance at 163.50 - 164.00.
🔻 Stop Loss Placement:
Below 156.08 (previous support zone) to protect against trend invalidation.
Alternatively, below the rising trendline for a dynamic SL approach.
🎯 Take Profit Targets:
TP1: 163.50 - 164.00 resistance zone (Partial profits).
TP2: 166.79 final target, aligning with historical resistance.
5. Market Outlook & Potential Scenarios
✅ Bullish Scenario (High Probability)
If price holds above the trendline and breaks 163.50 - 164.00, we expect a continuation towards 166.79.
The structure remains intact as long as higher highs and higher lows persist.
❌ Bearish Scenario (Low Probability, but Possible)
If price fails at resistance and breaks below the trendline, it could signal a deeper retracement.
A break below 156.08 would completely invalidate the bullish setup, leading to a potential downtrend.
6. Summary & Key Takeaways
Trend Bias: Bullish, supported by a falling wedge breakout and higher highs.
Key Levels: Support at 156.08, resistance at 163.50 - 164.00, final target at 166.79.
Trading Strategy: Buy on retests of trendline or resistance breakouts.
Risk Management: Use dynamic stop-loss levels to minimize downside exposure.
🔹 Final Verdict:
If price remains above support and successfully breaks 163.50 - 164.00, a strong move toward 166.79 is expected. However, traders should remain cautious of trendline breakdowns and manage risk accordingly.
📊 Stay disciplined, follow your trading plan, and always use stop-loss protection! 🚀 #EURJPY #Forex #TradingStrategy #PriceAction
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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.
💰FREE GOLD signals in Telegram:
t.me/goldmastertradezone
💰FREE GOLD Scalping signals Daily 5-6 Trades in Telegram: t.me/goldmastertradezone
t.me/goldmastertradezone
💰FREE GOLD Scalping signals Daily 5-6 Trades in Telegram: t.me/goldmastertradezone
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.