Since breaking out of the long term down trend channel, USD/JPY has formed 3 bearish Rising Wedge patterns. The first wedge was formed over 105 bars (147 days) and dropped 6%. The second was 85 bars (120 days) and dropped 6%. The third is potentially 103 bars (147 days) and could potentially drop 6% ('Potentially' as awaiting confirmation of wedge completion).
The third wedge has not yet had confirmation and could potentially try to retest the top of the wedge, if so I will open a short around 110.200 with 105.000 as target.
If tomorrow's daily candle closes below the bottom line of the wedge, I will look to enter a short at the first test of previous wedge support becoming resistance, so 108.600 with 105.000 as target.
The 105.000 is target is based on two factors: based on the two preceding wedge's producing 6% drops, a 5% target seems fair. Also the black horizontal dotted line is a structure line that has produced significant support/resistance previously.
Will chose exact entries on lower timeframe after tomorrows price action.
The third wedge has not yet had confirmation and could potentially try to retest the top of the wedge, if so I will open a short around 110.200 with 105.000 as target.
If tomorrow's daily candle closes below the bottom line of the wedge, I will look to enter a short at the first test of previous wedge support becoming resistance, so 108.600 with 105.000 as target.
The 105.000 is target is based on two factors: based on the two preceding wedge's producing 6% drops, a 5% target seems fair. Also the black horizontal dotted line is a structure line that has produced significant support/resistance previously.
Will chose exact entries on lower timeframe after tomorrows price action.
Trade active:
Trade Active - We are in! Let's see this drop!