CHF/USD – Double Bottom Reversal Setup - Trading SetupComprehensive Analysis of CHF/USD 4-Hour Chart
The CHF/USD 4-hour chart presents a technical trading setup based on a Double Bottom reversal pattern, combined with trendline support and key resistance levels. This pattern suggests a potential bullish breakout if key resistance is cleared. Below is a professional breakdown of the chart, covering the market structure, pattern formation, and a strategic trading setup.
1️⃣ Market Structure & Trend Analysis
The overall market structure suggests that CHF/USD has been in an uptrend, as indicated by the ascending trendline that has consistently provided support. The price has recently tested a key support zone twice, forming the Double Bottom pattern, which is known for signaling a trend reversal or continuation of an uptrend.
The dashed trendline connecting higher lows confirms the bullish momentum.
As long as the price stays above this trendline support, the bullish bias remains valid.
A break below the trendline would indicate a possible reversal or a deeper retracement.
The most critical observation here is that the price is respecting both the trendline and horizontal support zone, which increases the likelihood of a breakout in the upward direction.
2️⃣ Double Bottom Pattern Formation
The Double Bottom pattern is clearly formed at a strong demand zone, reinforcing the idea that buyers are stepping in to prevent further declines.
The first bottom was formed after a rejection from the 1.1250 - 1.1290 support zone.
The price then attempted to recover but faced resistance at 1.1350 - 1.1400, which now acts as the neckline of the pattern.
The second bottom was formed at approximately the same price level as the first, confirming the validity of the pattern.
A Double Bottom pattern is considered bullish, but confirmation is required through a breakout above the neckline resistance (1.1350 - 1.1400). If the price successfully breaks this level, it will indicate that buyers have regained control and the price is likely to move higher.
3️⃣ Key Support and Resistance Levels
In this setup, there are three crucial price zones: support, resistance, and the target area.
The support zone, located around 1.1250 - 1.1290, is where buyers stepped in to push the price higher. This level is crucial because it provided strong demand during the formation of the Double Bottom.
The resistance level at 1.1350 - 1.1400 serves as the neckline of the pattern. A breakout above this level would confirm the bullish trend continuation, while rejection could lead to another retest of support.
The target area is projected around 1.1500 - 1.1550, based on the measured move of the Double Bottom formation. This is the price level where traders may start taking profits if the bullish breakout occurs.
4️⃣ Trade Execution Plan
To take advantage of this potential setup, traders should focus on three key aspects: entry, stop-loss placement, and take-profit levels.
Entry Strategy
Aggressive traders can enter a long position above 1.1350, anticipating an immediate breakout.
Conservative traders may wait for a break and retest of the 1.1350 - 1.1400 zone, which would act as a confirmation for a sustained bullish move.
Stop-Loss Placement
A logical stop-loss should be set below 1.1138, which is beneath the Double Bottom formation and trendline support.
If the price drops below this level, it would invalidate the bullish setup and signal a potential trend reversal.
Profit Targets
The first target zone lies around 1.1450 - 1.1500, where traders may consider securing partial profits.
The extended target zone is 1.1550, which aligns with the expected measured move of the Double Bottom pattern.
5️⃣ Risk Management & Final Considerations
Since this setup is based on a strong trendline support and bullish pattern, risk management is essential to protect against fake breakouts or sudden trend reversals.
Traders should monitor price action near the 1.1350 - 1.1400 resistance zone. A strong bullish candle closing above this area increases the likelihood of a successful breakout.
If the price fails to break out and starts moving lower, it may indicate that sellers are still in control, which could lead to a deeper correction toward 1.1200 or lower.
6️⃣ Summary & TradingView Idea
This CHF/USD 4-hour chart presents a high-probability bullish setup based on a Double Bottom reversal at a strong support zone. The key confirmation level to watch is 1.1350 - 1.1400, which, if broken, will likely push the price toward 1.1500 - 1.1550.
Entry: Buy above 1.1350 or after a breakout retest.
Stop Loss: Below 1.1138 to avoid false breakouts.
Take Profit: First target at 1.1450 - 1.1500, extended target at 1.1550.
This setup provides a favorable risk-to-reward ratio, making it a strong potential trading opportunity. However, traders should always wait for confirmation signals before entering a position. 🚀
