USD/CHF Bearish Setup: Technical Analysis & Trade Opportunity
Pattern Formation: Bearish Bat Harmonic Pattern:
The USD/CHF is currently forming a Bearish Bat Harmonic Pattern, which suggests a potential reversal to the downside. The pattern is nearing completion at a key resistance level, providing a strong setup for a bearish entry.
Key Resistance and Fibonacci Confluence:
The pair has received a significant rejection from a crucial resistance zone, which aligns precisely with the 0.786 Fibonacci retracement level. This confluence strengthens the bearish outlook, indicating that sellers are defending this area effectively.
RSI Analysis:
Bearish Divergence A clear Bearish Divergence is evident on the 4-hour Relative Strength Index (RSI), further supporting the bearish sentiment. As the price makes higher highs, the RSI is making lower highs, indicating weakening bullish momentum and signaling a potential reversal.
Trade Setup:
Entry, Stop Loss, and Take Profit Levels
Entry Level: 0.86325
Stop Loss: 0.86955
Risk Management:
The stop loss is set slightly above the resistance level to protect against false breakouts and unexpected volatility.
Take Profit Targets:
TP-1: 0.85695 - This level provides a conservative target for traders looking to secure initial profits.
TP-2: 0.85065 - A medium target that aligns with further downside potential, giving room for extended profits.
TP-3: 0.84435 - A more ambitious target for traders expecting a deeper retracement.
Conclusion:
The USD/CHF pair presents a compelling bearish setup based on the Bearish Bat Harmonic Pattern, resistance at the 0.786 Fibonacci level, and bearish RSI divergence. Traders should monitor price action near the entry point and follow proper risk management, as outlined in the trade setup.
The USD/CHF is currently forming a Bearish Bat Harmonic Pattern, which suggests a potential reversal to the downside. The pattern is nearing completion at a key resistance level, providing a strong setup for a bearish entry.
Key Resistance and Fibonacci Confluence:
The pair has received a significant rejection from a crucial resistance zone, which aligns precisely with the 0.786 Fibonacci retracement level. This confluence strengthens the bearish outlook, indicating that sellers are defending this area effectively.
RSI Analysis:
Bearish Divergence A clear Bearish Divergence is evident on the 4-hour Relative Strength Index (RSI), further supporting the bearish sentiment. As the price makes higher highs, the RSI is making lower highs, indicating weakening bullish momentum and signaling a potential reversal.
Trade Setup:
Entry, Stop Loss, and Take Profit Levels
Entry Level: 0.86325
Stop Loss: 0.86955
Risk Management:
The stop loss is set slightly above the resistance level to protect against false breakouts and unexpected volatility.
Take Profit Targets:
TP-1: 0.85695 - This level provides a conservative target for traders looking to secure initial profits.
TP-2: 0.85065 - A medium target that aligns with further downside potential, giving room for extended profits.
TP-3: 0.84435 - A more ambitious target for traders expecting a deeper retracement.
Conclusion:
The USD/CHF pair presents a compelling bearish setup based on the Bearish Bat Harmonic Pattern, resistance at the 0.786 Fibonacci level, and bearish RSI divergence. Traders should monitor price action near the entry point and follow proper risk management, as outlined in the trade setup.
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.