USD/CHF - Too many signs to ignore!!

2023年8月31日

Time Frame:
Weekly/Daily – Analysis & Levels
1 HR – Confirmation
1 HR/30 Min - Execution

Trend: LTF Pullback within HTF downtrend. Resistance and bounce at 50% retracement on fib.
- HTF (Daily) = Downtrend
- LTF (1 Hour) = Uptrend

This trade has a lot of confluence for us to have a pretty sizable move to the downside.

1. We have a symmetrical triangle pattern (in black) holding us within these levels since 2012. In July 2023 we broke out of this pattern with a ton of strength, bringing us down to a level of strong support and a low since 2015.
2. Price rebounded from this support but with unimpressive volume, leading me to believe there is a lack of liquidity for buyers to get the necessary push up to break back into the triangle and former trading zone.
3. This rebound/retrace also led us to 50% on the fib which we are holding strong at with strong rejection indications.
4. We currently in an already mitigated demand zone that was formed from a prior liquidity grab – and below that, a strong unmitigated demand zone & POI.
5. We are approaching a retest of the bottom of the triangle which will require a lot of volume to break through – ans at the same time, we are approaching the top of the daily trend line (blue) in which we have rejected 3 times this year.

Confluence Review:
1. Continue higher time frame downtrend
2. Break below weekly/10 year trend line/support channel – Heading for retest of break point
3. Top of strong selling channel which has proven to be resistance 3 times
4. Strong support @ .857 that led to rebound but with low buying volume
5. Resistance at 50% retrace (current price)

My Trade Plan and Hypothesis:

Trade 1: Resistance at upper blue trend line and failed support at lower green trend line.
I predict price to mitigate the lower demand zone/POI. I will wait for price to reject the top of our LTF selling channel (blue trendline on daily chart) and subsequently fail support on the LTF buying channel (Green trendline on 1 hour chart).

Stop Loss – Above/break of blue trendline
Take Profit 1 – Strong Weekly Support / Recent Lower Low = 2.32 R:R
Take Profit 2 – Unmitigated Demand Zone / POI = 6.5 R:R

Trade 2: - Resistance and failure to break back into black HTF triangle.
If price breaks out of the daily TF blue selling channel, I will wait for a retest of the bottom of weekly symmetrical triangle (black trendline on all charts). Once there are signs of strong rejection I will enter trade on 30min/1 hour timeframe.

Stop Loss – Above/break of bottom of weekly channel
Take Profit - Unmitigated Demand Zone / POI = 7.38 R:R