USDJPY Chart Analysis

  • 2023-12-13
  • Ruchit Thakur

 

#USDJPY Weekly Chart Analysis: 

Take a look at #USDJPY Chart; We have discussed this chart pattern in our live session and discussed this beautiful structure and excellent opportunity with all students in session. #USDJPY trade was a perfect short opportunity around the 151-151.50 zone with small stop loss as Risk to Reward ratio was so favorable for this trade. In this blog, We will discuss the whole structure and what made us bearish in #USDJPY.

 

#USDJPY made a double top around the 152 zone and reversed from there. #USDJPY also formed a rising wedge pattern and breakdown was below 149 zone. We have discussed the double top pattern and rising wedge in our live class and explained it in detail. 

Now let's discuss Double Top Pattern and rising wedge pattern and discuss it in detail:

When a double top chart pattern appears, a trend reversal starts. Let’s learn how to identify this chart pattern and trade it.

 

Double Top : A double top is an extremely bearish technical reversal pattern that forms after an asset reaches a high price two consecutive times with a moderate decline between the two highs. It is confirmed once the asset's price falls after touching the same price zone two times.

A double top is a reversal pattern that is formed after there is an extended move up. The tops are peaks that are formed when the price hits a certain level that can’t be broken. After hitting this level, the price will bounce off it slightly, but then return back to test the level again. If the price bounces off of that level again, then you have a DOUBLE top and also shorting opportunity with proper stop loss.

In this above chart you can see that two peaks or “tops” were formed after a strong move up. Notice how the second top was not able to break the high of the first top. This is a strong sign that a reversal is going to occur because it is telling us that the buying pressure is just about to finish.

With the double top, we would place our entry order below the resistance because we are anticipating a reversal of the uptrend.

Remember that double tops are a trend reversal formation so you’ll want to look for these after there is a strong uptrend.

Another pattern which #USDJPY formed is rising wedge pattern, Now let's look at Rising Wedge Pattern and understand it :

 

 

Rising Wedge Pattern : The rising wedge pattern is a bearish chart pattern that signals an immediate breakdown towards the downside. It’s the opposite of the falling wedge pattern.

In this post, we discuss the rising wedge formation, its main characteristics and how to spot it in a real time frame.

The rising wedge consists of two converging trend lines that connect the most recent higher lows and higher highs. In a rising wedge, the lows are catching up with the highs at a higher pace, which means that the lower trend line is steeper.

A rising wedge occurs in the uptrend, when it is seen as a continuation pattern as it seeks to extend the current bullish move Or it can occur in an uptrend, ultimately resulting in a reversal pattern.

As with the rising wedge, we note three key features :

  • The price action temporarily trades in an uptrend (the higher highs and higher lows)
  • Two trend lines (support and resistance) that are converging
  • The decrease in volume as the wedge progresses towards the breakdown
  • The decreasing volume suggests that the sellers are consolidating their energy before they start pushing the price action lower towards the breakdown.

 

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