📌 Overview: Understanding the Current Market Structure
This analysis focuses on the JPY/USD pair on the 1-hour timeframe, highlighting a well-defined descending triangle pattern, a classic bearish continuation setup. The price action indicates selling pressure increasing as lower highs form, while support remained relatively stable before ultimately breaking down.
This setup suggests a potential trend continuation to the downside, making it a compelling trade opportunity for short-sellers. Let's dive deeper into the technical breakdown, trading strategy, and market expectations.
📊 Technical Breakdown: Chart Pattern Analysis
1️⃣ The Descending Triangle Pattern: A Bearish Signal
The descending triangle is one of the most reliable continuation patterns in technical analysis, often leading to a breakdown when support is breached. This chart confirms the pattern through:
✅ Downward Sloping Resistance Line:
The price tested this level multiple times but was consistently rejected.
Lower highs indicate sellers are dominating and buyers are failing to push higher.
✅ Flat Support Level:
The price found strong support at a key horizontal level, bouncing off multiple times.
However, each bounce became weaker, signaling buyers losing strength.
✅ Breakout & Confirmation:
The final breakdown below support occurred with strong momentum.
The price has now turned previous support into resistance, a bearish confirmation.
🔎 Implication:
A descending triangle breakout to the downside often results in an extended downward move, aiming for the measured move target based on the triangle’s height.
2️⃣ Key Price Levels & Trading Zones
📌 🔴 Resistance Zone (Upper Triangle Boundary):
0.006700 – 0.006750
This level acted as a strong rejection zone, confirming lower highs.
It now serves as a resistance level after the breakdown.
📌 🟢 Support Level (Triangle Base):
This level previously held price from breaking lower multiple times.
However, with each bounce becoming weaker, it finally gave way.
Break & Close below this level confirms the bearish continuation.
📌 🎯 Target Projection (Based on Triangle Breakout):
0.006448 (Final Target) – This level aligns with historical price action and the triangle’s projected move.
📌 🚨 Stop Loss Placement:
Above the last swing high (~0.006752)
If price reclaims this zone, the bearish outlook becomes invalid.
📈 Price Action & Market Sentiment
3️⃣ Bearish Momentum & Breakdown Confirmation
✅ Lower Highs Indicate Weakness:
Buyers attempted multiple recoveries but were consistently rejected at lower levels.
This pattern suggests exhaustion in buying pressure.
✅ Breakout Candle Strength & Volume Confirmation:
The price broke support with strong momentum and increased volume, confirming sellers’ control.
A breakdown without volume is often a fakeout, but this chart shows clear momentum.
✅ Potential Retest Before Further Drop:
After a breakdown, price often retests the broken support before continuing lower.
A pullback to the resistance zone (~0.006650 - 0.006700) could offer an ideal short entry.
✅ Bearish Trend Confirmation:
The price remains below key resistance and continues forming lower lows.
The downtrend structure remains intact, reinforcing the bearish sentiment.
📉 Trading Strategy: How to Trade This Setup?
🔹 Entry Strategy:
Ideal Entry: Short after a pullback to broken support (~0.006650 - 0.006700).
Aggressive Entry: Short immediately on the breakdown if momentum remains strong.
🔹 Stop Loss Placement:
Place above last swing high (0.006752) to avoid being stopped out by noise.
Ensures protection against sudden bullish reversals or fakeouts.
🔹 Take Profit Targets:
✅ First Target: 0.006500 (Psychological level)
✅ Final Target: 0.006448 (Triangle measured move)
🔹 Risk Management:
Use a Risk-to-Reward ratio (RRR) of at least 1:2 for an optimal trade setup.
Never risk more than 2% of total capital per trade.
⚠️ Market Outlook & Key Watchpoints
📌 Scenario 1: Bearish Continuation (High Probability)
If price retests the broken support and faces rejection, expect further downside.
Target remains at 0.006448.
📌 Scenario 2: Fake Breakdown & Bullish Reversal (Low Probability)
If price closes above 0.006750, it invalidates the bearish setup.
In that case, a bullish move towards 0.006800+ is possible.
📢 Final Thoughts:
The bearish breakout is clear, but waiting for a proper pullback before entry is ideal.
Volume confirmation is crucial to avoid fakeouts.
If support turns into resistance, a high-probability short trade is set up.
🔹 What’s your take on this setup? Will JPY/USD reach its target? Drop your thoughts below! 🚀
#JPYUSD #ForexTrading #TechnicalAnalysis #PriceAction
This analysis focuses on the JPY/USD pair on the 1-hour timeframe, highlighting a well-defined descending triangle pattern, a classic bearish continuation setup. The price action indicates selling pressure increasing as lower highs form, while support remained relatively stable before ultimately breaking down.
This setup suggests a potential trend continuation to the downside, making it a compelling trade opportunity for short-sellers. Let's dive deeper into the technical breakdown, trading strategy, and market expectations.
📊 Technical Breakdown: Chart Pattern Analysis
1️⃣ The Descending Triangle Pattern: A Bearish Signal
The descending triangle is one of the most reliable continuation patterns in technical analysis, often leading to a breakdown when support is breached. This chart confirms the pattern through:
✅ Downward Sloping Resistance Line:
The price tested this level multiple times but was consistently rejected.
Lower highs indicate sellers are dominating and buyers are failing to push higher.
✅ Flat Support Level:
The price found strong support at a key horizontal level, bouncing off multiple times.
However, each bounce became weaker, signaling buyers losing strength.
✅ Breakout & Confirmation:
The final breakdown below support occurred with strong momentum.
The price has now turned previous support into resistance, a bearish confirmation.
🔎 Implication:
A descending triangle breakout to the downside often results in an extended downward move, aiming for the measured move target based on the triangle’s height.
2️⃣ Key Price Levels & Trading Zones
📌 🔴 Resistance Zone (Upper Triangle Boundary):
0.006700 – 0.006750
This level acted as a strong rejection zone, confirming lower highs.
It now serves as a resistance level after the breakdown.
📌 🟢 Support Level (Triangle Base):
This level previously held price from breaking lower multiple times.
However, with each bounce becoming weaker, it finally gave way.
Break & Close below this level confirms the bearish continuation.
📌 🎯 Target Projection (Based on Triangle Breakout):
0.006448 (Final Target) – This level aligns with historical price action and the triangle’s projected move.
📌 🚨 Stop Loss Placement:
Above the last swing high (~0.006752)
If price reclaims this zone, the bearish outlook becomes invalid.
📈 Price Action & Market Sentiment
3️⃣ Bearish Momentum & Breakdown Confirmation
✅ Lower Highs Indicate Weakness:
Buyers attempted multiple recoveries but were consistently rejected at lower levels.
This pattern suggests exhaustion in buying pressure.
✅ Breakout Candle Strength & Volume Confirmation:
The price broke support with strong momentum and increased volume, confirming sellers’ control.
A breakdown without volume is often a fakeout, but this chart shows clear momentum.
✅ Potential Retest Before Further Drop:
After a breakdown, price often retests the broken support before continuing lower.
A pullback to the resistance zone (~0.006650 - 0.006700) could offer an ideal short entry.
✅ Bearish Trend Confirmation:
The price remains below key resistance and continues forming lower lows.
The downtrend structure remains intact, reinforcing the bearish sentiment.
📉 Trading Strategy: How to Trade This Setup?
🔹 Entry Strategy:
Ideal Entry: Short after a pullback to broken support (~0.006650 - 0.006700).
Aggressive Entry: Short immediately on the breakdown if momentum remains strong.
🔹 Stop Loss Placement:
Place above last swing high (0.006752) to avoid being stopped out by noise.
Ensures protection against sudden bullish reversals or fakeouts.
🔹 Take Profit Targets:
✅ First Target: 0.006500 (Psychological level)
✅ Final Target: 0.006448 (Triangle measured move)
🔹 Risk Management:
Use a Risk-to-Reward ratio (RRR) of at least 1:2 for an optimal trade setup.
Never risk more than 2% of total capital per trade.
⚠️ Market Outlook & Key Watchpoints
📌 Scenario 1: Bearish Continuation (High Probability)
If price retests the broken support and faces rejection, expect further downside.
Target remains at 0.006448.
📌 Scenario 2: Fake Breakdown & Bullish Reversal (Low Probability)
If price closes above 0.006750, it invalidates the bearish setup.
In that case, a bullish move towards 0.006800+ is possible.
📢 Final Thoughts:
The bearish breakout is clear, but waiting for a proper pullback before entry is ideal.
Volume confirmation is crucial to avoid fakeouts.
If support turns into resistance, a high-probability short trade is set up.
🔹 What’s your take on this setup? Will JPY/USD reach its target? Drop your thoughts below! 🚀
#JPYUSD #ForexTrading #TechnicalAnalysis #PriceAction
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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.
💰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.