CHF/USD – Advanced Technical Breakdown & Bullish Trade Setup
Timeframe: 30-Minute | Instrument: Swiss Franc / U.S. Dollar
Pattern: Falling Wedge | Strategy Type: Reversal Trade | Market Bias: Bullish
🔍 1. Price Action Overview: Trend Analysis
The recent CHF/USD movement displays a persistent bearish trend, where sellers have driven price from above the 1.2400 level down to the 1.2040 zone. However, a close look at the price action shows bearish momentum fading, marked by:
Shrinking bearish candles
Increasing wicks on the downside
A lack of new aggressive lower lows
This behavior typically suggests seller exhaustion and growing buying pressure. It lays the foundation for a potential bullish reversal — particularly valuable for short-term swing or intraday traders.
📐 2. Chart Pattern Analysis: Falling Wedge Formation
The core pattern forming here is a Falling Wedge, a bullish reversal structure characterized by:
Downward sloping upper and lower trendlines converging over time
Decreasing volatility within the wedge
A likely bullish breakout above resistance as price nears the apex
In this case, the wedge spans from approximately 1.2450 down to 1.2040, giving the pattern a significant size and thus, a more meaningful potential breakout.
🧱 3. Support & Resistance Breakdown
✅ Support Zone (1.2040 – 1.2025):
Price has bounced from this area multiple times in recent sessions.
This zone marks a high-probability demand area, where buy orders are concentrated.
The wedge’s lower boundary aligns here, creating confluence — a major technical signal.
❌ Immediate Resistance (1.2085):
Former support turned resistance
First barrier for buyers after breakout; potential short-term profit zone
🎯 Major Target (1.2181):
Based on the measured move of the wedge pattern
Coincides with prior swing high
Acts as a final price objective for the bullish move
🎯 4. Trade Setup Plan
📥 Entry Criteria:
Enter long on a confirmed breakout candle above the wedge resistance (break and close)
Ideal confirmation includes volume expansion and a bullish engulfing or strong momentum candle
🛡️ Stop-Loss (SL):
Below recent swing low: 1.1946
Protects against invalidation of the bullish scenario
Allows for a balanced risk management with room for natural volatility
💰 Take-Profit (TP):
TP1: 1.2085 (previous support turned resistance)
TP2: 1.2181 (wedge measured move target)
Partial profit-taking at TP1 is advised, with the remainder left to run toward TP2 using a trailing stop.
⚖️ 5. Risk-to-Reward Evaluation
Entry (estimated) SL TP1 TP2 R:R (TP1) R:R (TP2)
1.2055 1.1946 1.2085 1.2181 ~1:1 ~1:2.5
This setup offers an optimal risk-reward balance, especially for breakout or swing traders.
Conservative traders may wait for a retest of the breakout level before entering.
🧠 6. Market Psychology Behind the Setup
The wedge shows that:
Sellers are still in control, but momentum is weakening.
Buyers are stepping in at key support (1.2040), defending the zone repeatedly.
As the range compresses, trapped sellers and breakout buyers may cause a sharp upward move once the resistance breaks.
This kind of setup often results in quick price expansion, especially if the breakout triggers automated buy orders and stop-loss clusters above resistance.
🧰 7. Additional Technical Notes
RSI and MACD (not shown in chart) would ideally show bullish divergence for added confirmation.
A clean breakout may also be followed by a bullish flag or pennant, offering re-entry opportunities.
Economic news surrounding CHF or USD may act as a catalyst — stay alert for upcoming data.
✅ 8. Trading Strategy Summary
Element Details
Pattern Falling Wedge
Signal Bullish Reversal
Entry Trigger Breakout + Candle Confirmation
SL Location Below Support/Wedge Base (1.1946)
TP Levels 1.2085 (TP1), 1.2181 (TP2)
R:R Profile Favorable: ~1:2.5
📝 Final Thoughts
This is a textbook reversal opportunity backed by a clean falling wedge, strong horizontal support, and well-defined trade levels. It combines price structure, psychological context, and practical trade mechanics — making it ideal for swing traders, technical analysts, and strategy-focused investors alike.
Timeframe: 30-Minute | Instrument: Swiss Franc / U.S. Dollar
Pattern: Falling Wedge | Strategy Type: Reversal Trade | Market Bias: Bullish
🔍 1. Price Action Overview: Trend Analysis
The recent CHF/USD movement displays a persistent bearish trend, where sellers have driven price from above the 1.2400 level down to the 1.2040 zone. However, a close look at the price action shows bearish momentum fading, marked by:
Shrinking bearish candles
Increasing wicks on the downside
A lack of new aggressive lower lows
This behavior typically suggests seller exhaustion and growing buying pressure. It lays the foundation for a potential bullish reversal — particularly valuable for short-term swing or intraday traders.
📐 2. Chart Pattern Analysis: Falling Wedge Formation
The core pattern forming here is a Falling Wedge, a bullish reversal structure characterized by:
Downward sloping upper and lower trendlines converging over time
Decreasing volatility within the wedge
A likely bullish breakout above resistance as price nears the apex
In this case, the wedge spans from approximately 1.2450 down to 1.2040, giving the pattern a significant size and thus, a more meaningful potential breakout.
🧱 3. Support & Resistance Breakdown
✅ Support Zone (1.2040 – 1.2025):
Price has bounced from this area multiple times in recent sessions.
This zone marks a high-probability demand area, where buy orders are concentrated.
The wedge’s lower boundary aligns here, creating confluence — a major technical signal.
❌ Immediate Resistance (1.2085):
Former support turned resistance
First barrier for buyers after breakout; potential short-term profit zone
🎯 Major Target (1.2181):
Based on the measured move of the wedge pattern
Coincides with prior swing high
Acts as a final price objective for the bullish move
🎯 4. Trade Setup Plan
📥 Entry Criteria:
Enter long on a confirmed breakout candle above the wedge resistance (break and close)
Ideal confirmation includes volume expansion and a bullish engulfing or strong momentum candle
🛡️ Stop-Loss (SL):
Below recent swing low: 1.1946
Protects against invalidation of the bullish scenario
Allows for a balanced risk management with room for natural volatility
💰 Take-Profit (TP):
TP1: 1.2085 (previous support turned resistance)
TP2: 1.2181 (wedge measured move target)
Partial profit-taking at TP1 is advised, with the remainder left to run toward TP2 using a trailing stop.
⚖️ 5. Risk-to-Reward Evaluation
Entry (estimated) SL TP1 TP2 R:R (TP1) R:R (TP2)
1.2055 1.1946 1.2085 1.2181 ~1:1 ~1:2.5
This setup offers an optimal risk-reward balance, especially for breakout or swing traders.
Conservative traders may wait for a retest of the breakout level before entering.
🧠 6. Market Psychology Behind the Setup
The wedge shows that:
Sellers are still in control, but momentum is weakening.
Buyers are stepping in at key support (1.2040), defending the zone repeatedly.
As the range compresses, trapped sellers and breakout buyers may cause a sharp upward move once the resistance breaks.
This kind of setup often results in quick price expansion, especially if the breakout triggers automated buy orders and stop-loss clusters above resistance.
🧰 7. Additional Technical Notes
RSI and MACD (not shown in chart) would ideally show bullish divergence for added confirmation.
A clean breakout may also be followed by a bullish flag or pennant, offering re-entry opportunities.
Economic news surrounding CHF or USD may act as a catalyst — stay alert for upcoming data.
✅ 8. Trading Strategy Summary
Element Details
Pattern Falling Wedge
Signal Bullish Reversal
Entry Trigger Breakout + Candle Confirmation
SL Location Below Support/Wedge Base (1.1946)
TP Levels 1.2085 (TP1), 1.2181 (TP2)
R:R Profile Favorable: ~1:2.5
📝 Final Thoughts
This is a textbook reversal opportunity backed by a clean falling wedge, strong horizontal support, and well-defined trade levels. It combines price structure, psychological context, and practical trade mechanics — making it ideal for swing traders, technical analysts, and strategy-focused investors alike.
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.
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.