1️⃣ Chart Type & Timeframe:
Market: Japanese Yen (JPY) / U.S. Dollar (USD)
Timeframe: 1-hour chart (H1)
Platform: TradingView
This is an intraday chart used by traders to identify short-term price action and trend reversals.
2️⃣ Identifying the Key Chart Pattern – Head & Shoulders
The dominant pattern on this chart is the Head & Shoulders (H&S), a well-known bearish reversal signal that forms after an uptrend. Let’s break it down:
A. Formation of the Pattern
Left Shoulder: The price forms a peak, then retraces down to a support level.
Head: A higher peak is formed, followed by another decline, indicating buyers are losing control.
Right Shoulder: The price attempts another rise but fails to reach the previous high, showing bearish momentum is increasing.
B. Neckline & Trendline Support
The neckline acts as a key support level. A break below it confirms the bearish move.
The trendline, which has been supporting price action for a while, is also at risk of breaking.
3️⃣ Key Support & Resistance Levels
Resistance Level (0.006750 - 0.006819):
This is the previous high area where sellers are active. A stop-loss is placed above this level.
Support Level (0.006567 - 0.006468):
Key demand zones where buyers may step in. These are the take profit (TP) levels.
4️⃣ Price Action & Expected Movement
📉 Bearish Outlook – A potential breakdown from the neckline and trendline would confirm further downside.
If price breaks the trendline, a pullback to retest resistance is expected before dropping further.
Take Profit (TP) 1: 0.006567 – Minor support, possible bounce.
Take Profit (TP) 2: 0.006468 – Stronger support, deeper correction possible.
🚨 Stop Loss: Above 0.006819, just beyond the right shoulder and all-time high (ATH).
5️⃣ Trading Strategy & Execution
💡 Entry Strategy:
Sell Breakout Entry: Short the market when the neckline/trendline is broken with strong volume.
Retest Confirmation: Wait for a pullback to the broken trendline and enter when price rejects it.
📌 Risk Management:
Risk-to-Reward Ratio: 1:2 or higher for an optimal setup.
Use trailing stop-loss to secure profits if TP1 is hit.
6️⃣ Market Psychology & Smart Money Behavior
The Head & Shoulders pattern reflects buyer exhaustion and increased seller strength.
Smart money often enters after the breakdown when weak hands get stopped out.
Conclusion: Trade with Confidence!
This chart presents a high-probability bearish trading opportunity based on a textbook Head & Shoulders formation, support/resistance dynamics, and trendline analysis. A disciplined approach with risk management will ensure better execution.
📉 Final Verdict: Bearish Breakdown Expected – Sell the Retest!
🔥 Tags for TradingView Idea:
#JPYUSD #ForexTrading #HeadAndShoulders #TechnicalAnalysis #BearishReversal #SmartMoney #PriceAction #RiskManagement #TradingSetup #TrendlineBreak
Market: Japanese Yen (JPY) / U.S. Dollar (USD)
Timeframe: 1-hour chart (H1)
Platform: TradingView
This is an intraday chart used by traders to identify short-term price action and trend reversals.
2️⃣ Identifying the Key Chart Pattern – Head & Shoulders
The dominant pattern on this chart is the Head & Shoulders (H&S), a well-known bearish reversal signal that forms after an uptrend. Let’s break it down:
A. Formation of the Pattern
Left Shoulder: The price forms a peak, then retraces down to a support level.
Head: A higher peak is formed, followed by another decline, indicating buyers are losing control.
Right Shoulder: The price attempts another rise but fails to reach the previous high, showing bearish momentum is increasing.
B. Neckline & Trendline Support
The neckline acts as a key support level. A break below it confirms the bearish move.
The trendline, which has been supporting price action for a while, is also at risk of breaking.
3️⃣ Key Support & Resistance Levels
Resistance Level (0.006750 - 0.006819):
This is the previous high area where sellers are active. A stop-loss is placed above this level.
Support Level (0.006567 - 0.006468):
Key demand zones where buyers may step in. These are the take profit (TP) levels.
4️⃣ Price Action & Expected Movement
📉 Bearish Outlook – A potential breakdown from the neckline and trendline would confirm further downside.
If price breaks the trendline, a pullback to retest resistance is expected before dropping further.
Take Profit (TP) 1: 0.006567 – Minor support, possible bounce.
Take Profit (TP) 2: 0.006468 – Stronger support, deeper correction possible.
🚨 Stop Loss: Above 0.006819, just beyond the right shoulder and all-time high (ATH).
5️⃣ Trading Strategy & Execution
💡 Entry Strategy:
Sell Breakout Entry: Short the market when the neckline/trendline is broken with strong volume.
Retest Confirmation: Wait for a pullback to the broken trendline and enter when price rejects it.
📌 Risk Management:
Risk-to-Reward Ratio: 1:2 or higher for an optimal setup.
Use trailing stop-loss to secure profits if TP1 is hit.
6️⃣ Market Psychology & Smart Money Behavior
The Head & Shoulders pattern reflects buyer exhaustion and increased seller strength.
Smart money often enters after the breakdown when weak hands get stopped out.
Conclusion: Trade with Confidence!
This chart presents a high-probability bearish trading opportunity based on a textbook Head & Shoulders formation, support/resistance dynamics, and trendline analysis. A disciplined approach with risk management will ensure better execution.
📉 Final Verdict: Bearish Breakdown Expected – Sell the Retest!
🔥 Tags for TradingView Idea:
#JPYUSD #ForexTrading #HeadAndShoulders #TechnicalAnalysis #BearishReversal #SmartMoney #PriceAction #RiskManagement #TradingSetup #TrendlineBreak
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.
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.