USD/CHF: The Next Big Impulse Down? Here's The PlanHello, traders! Let's break down a high-probability short setup that could potentially form on USD/CHF.
📉 Overall Bias & Context
After another powerful bearish impulse, the price entered a correction, mitigating the previous range and reaching the maximum 78.6% Fibonacci retracement level. From this level, a potential continuation of the next impulse has begun.
The first confirmation was an impulsive reaction from the 4h order block that formed after interacting with the 78.6% Fib level. This reaction, in turn, created a 1h order block, which now acts as a magnet for price and is a key condition for the bearish trend to continue.
A mitigation and reversal from this 1h OB will confirm the bearish order flow and could initiate the next strong impulse down, with a minimum target of taking the low at 0.80384 .
Why This Setup is High-Potential
High Risk/Reward: This potential short setup could offer a very high RR. The deep corrective move has built up a significant amount of liquidity, which can fuel a fast and powerful move towards our target.
DXY Confluence: The Dollar Index (DXY) provides an additional trigger for this scenario. After its own bearish impulse, the DXY has also corrected to a 78.6% Fib level, bounced off a daily order block, and after a small pullback, looks ready to continue its fall, dragging the USDCHF pair with it.
The Entry Plan: Two Scenarios to Watch
We have two potential areas for a reaction. We must try not to miss this with-trend setup once we get an entry confirmation.
1️⃣ Scenario 1: Primary POI
* I'll be watching for a reaction from the aforementioned 1h order block, which aligns with the local 78.6% Fib level around 0.81840.
2️⃣ Scenario 2: Deeper Liquidity Grab
* If the first level is broken and the "whales" need additional liquidity, we could see a sweep of the 1h swing high at 0.81937, followed by a mitigation of the 1h FVG (Fair Value Gap) just above it.
The potential short entry zone will be within these two levels, after a clear reversal reaction.
Price is approaching the POI zone! Follow for live updates on every step of this trade idea as the price reaches the zone.
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