📊 USD/JPY 1H Technical Analysis – Double Top Reversal in Play
🔷 1. Chart Overview
The chart shows a strong bullish rally followed by a potential trend reversal signaled by a Double Top pattern – a classic bearish reversal formation. This setup is supported by clear resistance, support, and price structure confirmation, making it a well-structured shorting opportunity.
🔹 2. Pattern Formation – Double Top
Top 1 and Top 2:
Price peaked twice at the 0.007032 resistance level.
The two tops are approximately equal in height, with a slight retracement in between, forming the "M" shape typical of a double top.
Indicates buyer exhaustion and the potential beginning of a downtrend.
Resistance Zone:
Clearly defined horizontal resistance at 0.007032.
Rejected price on both occasions, showing sellers are firmly defending this level.
Support/Neckline:
The support level around 0.006932 acts as the neckline of the double top.
A break below this confirms the pattern.
🔹 3. Entry and Confirmation
Bearish Breakout:
Price is currently moving downward from the second peak.
A decisive close below the neckline (0.006932) with bearish volume would confirm the breakout.
Ideal Entry Point:
On a successful break and retest of the neckline support turned resistance (0.006932).
Traders may also enter early on confirmation with tight risk management.
🎯 4. Targets (Take Profits)
TP1 – 0.006932:
Conservative profit at the neckline for quick scalps or partial exit.
TP2 – 0.006843:
Full double top pattern measured move target.
Calculated by projecting the height of the pattern from the neckline downward.
Final Target – 0.006842:
Aligns with historical support.
Completion of bearish wave structure.
🛑 5. Stop Loss (SL)
SL – 0.007032:
Placed slightly above the double top resistance zone.
If price breaks above this level, the pattern is invalidated, and buyers regain control.
🧠 6. Professional Insights
Bearish Bias: Pattern favors downside continuation.
Risk-Reward: This setup offers an excellent R:R ratio, especially if entered after a retest.
Volume Confirmation: Ideally, volume should increase on the break of the neckline, confirming bearish strength.
Momentum Indicators (optional analysis): If using RSI or MACD, a bearish divergence on the second top would further strengthen the case.
✅ Conclusion – Trading Setup Summary
Component Level
Entry Break & Retest of 0.006932
Take Profit 1 0.006932
Take Profit 2 0.006843
Final Target 0.006842
Stop Loss (SL) 0.007032
Risk Direction Bearish
This setup reflects a technically sound short opportunity with clear structure, disciplined risk management, and defined price action confirmation. Suitable for intraday or swing traders.
🔷 1. Chart Overview
The chart shows a strong bullish rally followed by a potential trend reversal signaled by a Double Top pattern – a classic bearish reversal formation. This setup is supported by clear resistance, support, and price structure confirmation, making it a well-structured shorting opportunity.
🔹 2. Pattern Formation – Double Top
Top 1 and Top 2:
Price peaked twice at the 0.007032 resistance level.
The two tops are approximately equal in height, with a slight retracement in between, forming the "M" shape typical of a double top.
Indicates buyer exhaustion and the potential beginning of a downtrend.
Resistance Zone:
Clearly defined horizontal resistance at 0.007032.
Rejected price on both occasions, showing sellers are firmly defending this level.
Support/Neckline:
The support level around 0.006932 acts as the neckline of the double top.
A break below this confirms the pattern.
🔹 3. Entry and Confirmation
Bearish Breakout:
Price is currently moving downward from the second peak.
A decisive close below the neckline (0.006932) with bearish volume would confirm the breakout.
Ideal Entry Point:
On a successful break and retest of the neckline support turned resistance (0.006932).
Traders may also enter early on confirmation with tight risk management.
🎯 4. Targets (Take Profits)
TP1 – 0.006932:
Conservative profit at the neckline for quick scalps or partial exit.
TP2 – 0.006843:
Full double top pattern measured move target.
Calculated by projecting the height of the pattern from the neckline downward.
Final Target – 0.006842:
Aligns with historical support.
Completion of bearish wave structure.
🛑 5. Stop Loss (SL)
SL – 0.007032:
Placed slightly above the double top resistance zone.
If price breaks above this level, the pattern is invalidated, and buyers regain control.
🧠 6. Professional Insights
Bearish Bias: Pattern favors downside continuation.
Risk-Reward: This setup offers an excellent R:R ratio, especially if entered after a retest.
Volume Confirmation: Ideally, volume should increase on the break of the neckline, confirming bearish strength.
Momentum Indicators (optional analysis): If using RSI or MACD, a bearish divergence on the second top would further strengthen the case.
✅ Conclusion – Trading Setup Summary
Component Level
Entry Break & Retest of 0.006932
Take Profit 1 0.006932
Take Profit 2 0.006843
Final Target 0.006842
Stop Loss (SL) 0.007032
Risk Direction Bearish
This setup reflects a technically sound short opportunity with clear structure, disciplined risk management, and defined price action confirmation. Suitable for intraday or swing traders.
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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.