USDCAD Bullish Reversal Setup – Double Bottom Pattern
Timeframe: 45-Minute
Instrument: USDCAD (U.S. Dollar / Canadian Dollar)
Date: May 4, 2025
Chart Pattern: Double Bottom
Bias: Bullish Reversal
🧠 Technical Breakdown:
This chart highlights a classic Double Bottom pattern, signaling a potential end to the recent downtrend and a shift toward bullish momentum.
🔹 1. Downtrend Context
Price has been in a sustained bearish trend, forming a series of lower highs and lower lows. A descending trendline has been drawn from the swing high to outline this declining structure.
🔍 Pattern Identification:
✅ Double Bottom Structure
Bottom 1: Formed near the 1.37709 level, establishing a clear support zone.
Retracement: Price moved higher from this level but faced resistance around 1.38599, failing to break through.
Bottom 2: Price returned to the same support at 1.3770, but showed buying interest again—confirming a potential double bottom (W-shape).
Neckline Resistance: The key horizontal resistance at 1.38599 acts as the neckline of this pattern.
The pattern confirms bullish potential only when price breaks and closes above the neckline.
📊 Trade Plan:
🔹 Entry Strategy
Breakout Entry: Traders may consider entering a long position on a confirmed breakout above 1.38599.
Retest Entry: A more conservative entry would wait for a breakout followed by a retest of the neckline as support before entering long.
🔹 Stop Loss (SL):
Logical SL placement is below the second bottom (1.3770), giving room to avoid fakeouts. This invalidates the setup if price returns below this zone.
🔹 Take Profit (TP):
TP1 (Intermediate): The breakout point (neckline) at 1.38599.
TP2 (Full Target): The projected price target based on the height of the pattern (neckline to bottom) is around 1.39404.
📐 Measured Move Target:
Height from support to neckline ≈ 89 pips → 1.38599 + 0.0089 ≈ 1.39404
💡 Trade Logic Summary:
Component Price Level
Entry Trigger Above 1.38599
Stop Loss (SL) Below 1.37709
Take Profit 1 1.38599
Take Profit 2 1.39404
Support Zone 1.3765–1.3775
Resistance 1.3855–1.3860
🧠 Technical Confluence:
Double Bottom: Reversal signal after downtrend.
Strong Support Zone: Validated twice with significant buying reaction.
Trendline Break: Indicates weakening bearish control.
Bullish Structure: Higher low potentially forming after second bottom.
📌 Risk-Reward Profile:
Entry above: 1.3860
SL below: 1.3770 → ~90 pips risk
Target: 1.3940 → ~80 pips reward
With scaling at TP1, this setup provides a reward-to-risk ratio of ~1:1 or better with careful management.
Timeframe: 45-Minute
Instrument: USDCAD (U.S. Dollar / Canadian Dollar)
Date: May 4, 2025
Chart Pattern: Double Bottom
Bias: Bullish Reversal
🧠 Technical Breakdown:
This chart highlights a classic Double Bottom pattern, signaling a potential end to the recent downtrend and a shift toward bullish momentum.
🔹 1. Downtrend Context
Price has been in a sustained bearish trend, forming a series of lower highs and lower lows. A descending trendline has been drawn from the swing high to outline this declining structure.
🔍 Pattern Identification:
✅ Double Bottom Structure
Bottom 1: Formed near the 1.37709 level, establishing a clear support zone.
Retracement: Price moved higher from this level but faced resistance around 1.38599, failing to break through.
Bottom 2: Price returned to the same support at 1.3770, but showed buying interest again—confirming a potential double bottom (W-shape).
Neckline Resistance: The key horizontal resistance at 1.38599 acts as the neckline of this pattern.
The pattern confirms bullish potential only when price breaks and closes above the neckline.
📊 Trade Plan:
🔹 Entry Strategy
Breakout Entry: Traders may consider entering a long position on a confirmed breakout above 1.38599.
Retest Entry: A more conservative entry would wait for a breakout followed by a retest of the neckline as support before entering long.
🔹 Stop Loss (SL):
Logical SL placement is below the second bottom (1.3770), giving room to avoid fakeouts. This invalidates the setup if price returns below this zone.
🔹 Take Profit (TP):
TP1 (Intermediate): The breakout point (neckline) at 1.38599.
TP2 (Full Target): The projected price target based on the height of the pattern (neckline to bottom) is around 1.39404.
📐 Measured Move Target:
Height from support to neckline ≈ 89 pips → 1.38599 + 0.0089 ≈ 1.39404
💡 Trade Logic Summary:
Component Price Level
Entry Trigger Above 1.38599
Stop Loss (SL) Below 1.37709
Take Profit 1 1.38599
Take Profit 2 1.39404
Support Zone 1.3765–1.3775
Resistance 1.3855–1.3860
🧠 Technical Confluence:
Double Bottom: Reversal signal after downtrend.
Strong Support Zone: Validated twice with significant buying reaction.
Trendline Break: Indicates weakening bearish control.
Bullish Structure: Higher low potentially forming after second bottom.
📌 Risk-Reward Profile:
Entry above: 1.3860
SL below: 1.3770 → ~90 pips risk
Target: 1.3940 → ~80 pips reward
With scaling at TP1, this setup provides a reward-to-risk ratio of ~1:1 or better with careful management.
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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.
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.