🧠 Complete Professional Chart Analysis – CHF/USD (H1 Timeframe)
Pattern Focus: Rising Wedge → Double Top → Bearish Breakdown
🔍 Market Context
This CHF/USD hourly chart reflects a shift in momentum after an extended bullish trend. The pair displayed a healthy uptrend before entering into a classic distribution phase, where buyers started losing steam. The structure of the price action reveals critical reversal signals supported by chart patterns and horizontal support/resistance levels, which offer a clear bearish trading setup with defined risk parameters.
1️⃣ Bullish Phase & Rising Wedge Formation
Uptrend Initiation: The pair starts its bullish leg from the bottom of the chart (around April 10), forming a series of higher highs and higher lows, driven by bullish sentiment.
Volume and Momentum: During this rise, price candles become larger with smaller wicks, suggesting strong buyer conviction. Momentum indicators (not shown) likely confirmed the move.
Rising Wedge Pattern:
The price movement begins to compress into a Rising Wedge, identified by converging trendlines (drawn on the chart).
This structure often represents a bearish reversal when it forms after an uptrend, indicating weakening bullish momentum.
💡 Professional Tip: Rising wedges are reliable in uptrends as they hint at slowing momentum and potential distribution by institutional players.
2️⃣ Wedge Breakdown & Shift in Market Sentiment
Bearish Breakout: Price breaks below the lower trendline of the wedge, confirming bearish pressure.
Retest Behavior: After the breakout, the market attempts a retest of the former support trendline, now acting as resistance. This is a classic textbook move, validating the structure.
Initial Support Found: Price finds horizontal support around 1.2173, pausing its descent for a temporary rebound.
3️⃣ Double Top Formation at Key Resistance
Rally to Resistance: Price rallies back to retest the previous high (~1.2350), but this time the upward momentum is noticeably weaker.
Double Top Pattern:
Two peaks are formed at the same level, labeled Top 1 and Top 2 on the chart.
The neckline of the pattern is at the 1.2173 support zone (the previous reaction low between the tops).
Psychological Insight: The second top signifies a failed attempt by bulls to reclaim control. Sellers start to overpower buyers, confirming a potential reversal.
✅ This combination of the Double Top after a wedge breakdown is a strong confluence for a high-probability bearish trade.
4️⃣ Trade Setup Explanation
Entry Trigger: A bearish entry is suggested once price breaks and closes below the neckline support at 1.2173.
Stop Loss (SL): Placed above the double top resistance at 1.2350, giving the trade breathing space.
Take Profit (TP): Target is set near the next major support level around 1.2098, a historically reactive zone.
📐 Risk-to-Reward Analysis:
Risk: ~177 pips (from 1.2173 to 1.2350)
Reward: ~75 pips (from 1.2173 to 1.2098)
Approximate R:R = 1:2.4 if managed actively (partial TP at neckline bounce).
5️⃣ Key Technical Confluences
Technical Element Signal
Rising Wedge Bearish Reversal
Double Top Pattern Bearish Confirmation
Support at 1.2173 Key Neckline Level
Resistance at 1.2350 Strong Supply Zone
Target at 1.2098 Valid Historical Support
Candlestick Reaction Bearish Rejection Wicks
6️⃣ Price Action Psychology Behind the Setup
Buyers had full control during the initial rally but began losing momentum inside the wedge.
Sellers gradually stepped in, leading to a breakdown.
Smart Money likely distributed positions near the top (double top area).
Traders & Institutions look for clean breakouts of such structures for short entries.
7️⃣ Trade Management & Strategy
Entry Confirmation: Wait for a strong candle close below 1.2173 on H1 or M30.
SL/TP Zones: Stick to your SL unless there's a fakeout. Partial profit can be taken if price hesitates near 1.2130.
Monitoring: Track macroeconomic data like U.S. Dollar or Swiss economic releases that may trigger volatility.
Add-ons: Further short positions can be stacked after pullbacks to 1.2173 if price structure remains bearish.
📌 Summary
✅ Pattern Combination:
Rising Wedge ➜ Breakdown ➜ Double Top ➜ Neckline Break ➜ Target Hit
🎯 Trade Plan:
Short below: 1.2173
TP: 1.2098
SL: 1.2350
Pattern Focus: Rising Wedge → Double Top → Bearish Breakdown
🔍 Market Context
This CHF/USD hourly chart reflects a shift in momentum after an extended bullish trend. The pair displayed a healthy uptrend before entering into a classic distribution phase, where buyers started losing steam. The structure of the price action reveals critical reversal signals supported by chart patterns and horizontal support/resistance levels, which offer a clear bearish trading setup with defined risk parameters.
1️⃣ Bullish Phase & Rising Wedge Formation
Uptrend Initiation: The pair starts its bullish leg from the bottom of the chart (around April 10), forming a series of higher highs and higher lows, driven by bullish sentiment.
Volume and Momentum: During this rise, price candles become larger with smaller wicks, suggesting strong buyer conviction. Momentum indicators (not shown) likely confirmed the move.
Rising Wedge Pattern:
The price movement begins to compress into a Rising Wedge, identified by converging trendlines (drawn on the chart).
This structure often represents a bearish reversal when it forms after an uptrend, indicating weakening bullish momentum.
💡 Professional Tip: Rising wedges are reliable in uptrends as they hint at slowing momentum and potential distribution by institutional players.
2️⃣ Wedge Breakdown & Shift in Market Sentiment
Bearish Breakout: Price breaks below the lower trendline of the wedge, confirming bearish pressure.
Retest Behavior: After the breakout, the market attempts a retest of the former support trendline, now acting as resistance. This is a classic textbook move, validating the structure.
Initial Support Found: Price finds horizontal support around 1.2173, pausing its descent for a temporary rebound.
3️⃣ Double Top Formation at Key Resistance
Rally to Resistance: Price rallies back to retest the previous high (~1.2350), but this time the upward momentum is noticeably weaker.
Double Top Pattern:
Two peaks are formed at the same level, labeled Top 1 and Top 2 on the chart.
The neckline of the pattern is at the 1.2173 support zone (the previous reaction low between the tops).
Psychological Insight: The second top signifies a failed attempt by bulls to reclaim control. Sellers start to overpower buyers, confirming a potential reversal.
✅ This combination of the Double Top after a wedge breakdown is a strong confluence for a high-probability bearish trade.
4️⃣ Trade Setup Explanation
Entry Trigger: A bearish entry is suggested once price breaks and closes below the neckline support at 1.2173.
Stop Loss (SL): Placed above the double top resistance at 1.2350, giving the trade breathing space.
Take Profit (TP): Target is set near the next major support level around 1.2098, a historically reactive zone.
📐 Risk-to-Reward Analysis:
Risk: ~177 pips (from 1.2173 to 1.2350)
Reward: ~75 pips (from 1.2173 to 1.2098)
Approximate R:R = 1:2.4 if managed actively (partial TP at neckline bounce).
5️⃣ Key Technical Confluences
Technical Element Signal
Rising Wedge Bearish Reversal
Double Top Pattern Bearish Confirmation
Support at 1.2173 Key Neckline Level
Resistance at 1.2350 Strong Supply Zone
Target at 1.2098 Valid Historical Support
Candlestick Reaction Bearish Rejection Wicks
6️⃣ Price Action Psychology Behind the Setup
Buyers had full control during the initial rally but began losing momentum inside the wedge.
Sellers gradually stepped in, leading to a breakdown.
Smart Money likely distributed positions near the top (double top area).
Traders & Institutions look for clean breakouts of such structures for short entries.
7️⃣ Trade Management & Strategy
Entry Confirmation: Wait for a strong candle close below 1.2173 on H1 or M30.
SL/TP Zones: Stick to your SL unless there's a fakeout. Partial profit can be taken if price hesitates near 1.2130.
Monitoring: Track macroeconomic data like U.S. Dollar or Swiss economic releases that may trigger volatility.
Add-ons: Further short positions can be stacked after pullbacks to 1.2173 if price structure remains bearish.
📌 Summary
✅ Pattern Combination:
Rising Wedge ➜ Breakdown ➜ Double Top ➜ Neckline Break ➜ Target Hit
🎯 Trade Plan:
Short below: 1.2173
TP: 1.2098
SL: 1.2350
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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.
Related publications
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.