Explained Trade: Wedge | EUR\JPY

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Wedge Chart Pattern trade

Wedge Chart Pattern that appeared at the Euro-Yen FOREX pair on Friday. This trade demonstrates confirmation of Chart Pattern entry with Fibonacci Retracement in larger timeframe.

Chart Pattern was a Broadening Wedge which signals Reversal of trend, and usually breaks downwards. Learn to trade Wedge Pattern here. In Wedges, short entry is issued when price stops on a Resistance level. In this example the Resistance level coincided with 38.2 Fibonacci Retracement from the 4-hour chart:
Fibonacci 38.2 Retracement

The Retracement also signals continuation of trend - and highly confirmed the Wedge direction. This is an example of cross-confirmation of entries from various Technical tools and larger time frames. Retracement from 4-hour chart was confirmed by a short-term entry in the 30-minute chart. These confirmations enhance the quality of trades and increase win percentage.