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I'd advise layer masks. See if the instructions on this page help: https://helpx.adobe.com/photoshop/using/masking-layers.html
I'd recommend using the gradient tool black/white to soften the edges. Remember, on a layer mask, the white part of the mask depicts the visible part of the layer. What's black is blocked (hidden, transparent). Using a gradient will give you a soft transition from one image to the other. Maybe even hold down the Shift key when dragging with the gradient tool, to ensure you're drawing straight up and down.
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