USD/CHF 1H Chart: Support Bounce Setup with Ascending Trendline
This USD/CHF setup shows a high-probability bullish continuation pattern, with price respecting a well-defined support zone and trendline. A breakout above 0.88700 could confirm the upward momentum toward the psychological resistance at 0.90000. Risk management is crucial, with stop-loss placement below the strong support at 0.88100.
Chart Analysis:
1. Key Support Zone:
The purple horizontal level at 0.88100 has acted as a strong demand zone based on multiple previous bounces (highlighted by the red arrows).
Price has rebounded from this area five times, confirming its significance as a pivotal support level.
2. Ascending Trendline:
A newly formed ascending trendline (white line) connects the recent higher lows, indicating strengthening bullish sentiment.
The trendline reinforces the expectation of upward movement as long as price remains above it.
3. Immediate Resistance:
The yellow line at 0.88700 serves as the nearest resistance level, representing a level of prior price rejection. This level needs to be broken for further bullish continuation.
4. Major Target:
0.90000 is the major resistance target (yellow line), aligning with a psychological level and prior swing highs. This level represents the ultimate take-profit zone for a bullish breakout.
5. Risk Management:
Stop-Loss: Below 0.88100, as a break below this level would invalidate the bullish structure and ascending trendline.
Entry: Near current price levels, confirming the bounce from the ascending trendline.
Take-Profit: Two levels:
First Target (0.88700): Immediate resistance, offering a conservative take-profit.
Second Target (0.90000): Aligns with prior highs and psychological resistance.
6. Market Context:
The pair is consolidating between the strong support zone (0.88100) and resistance levels, suggesting a range breakout scenario. A successful breakout above 0.88700 would likely attract further buyers toward 0.90000.
Trading Plan:
Bullish Scenario:
Enter long positions on confirmation of a bounce off the ascending trendline or a breakout above 0.88700.
Place a stop-loss below 0.88100 to manage risk.
Targets: First at 0.88700, with an extended target at 0.90000.
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Chart Analysis:
1. Key Support Zone:
The purple horizontal level at 0.88100 has acted as a strong demand zone based on multiple previous bounces (highlighted by the red arrows).
Price has rebounded from this area five times, confirming its significance as a pivotal support level.
2. Ascending Trendline:
A newly formed ascending trendline (white line) connects the recent higher lows, indicating strengthening bullish sentiment.
The trendline reinforces the expectation of upward movement as long as price remains above it.
3. Immediate Resistance:
The yellow line at 0.88700 serves as the nearest resistance level, representing a level of prior price rejection. This level needs to be broken for further bullish continuation.
4. Major Target:
0.90000 is the major resistance target (yellow line), aligning with a psychological level and prior swing highs. This level represents the ultimate take-profit zone for a bullish breakout.
5. Risk Management:
Stop-Loss: Below 0.88100, as a break below this level would invalidate the bullish structure and ascending trendline.
Entry: Near current price levels, confirming the bounce from the ascending trendline.
Take-Profit: Two levels:
First Target (0.88700): Immediate resistance, offering a conservative take-profit.
Second Target (0.90000): Aligns with prior highs and psychological resistance.
6. Market Context:
The pair is consolidating between the strong support zone (0.88100) and resistance levels, suggesting a range breakout scenario. A successful breakout above 0.88700 would likely attract further buyers toward 0.90000.
Trading Plan:
Bullish Scenario:
Enter long positions on confirmation of a bounce off the ascending trendline or a breakout above 0.88700.
Place a stop-loss below 0.88100 to manage risk.
Targets: First at 0.88700, with an extended target at 0.90000.
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