We have seen USD/CHF in a clean downwards channel recently with no sign of a reversal. However, we are approaching a strong demand area which has been quite significant in holding previous support.
Although price has broken below the structure, I am seeing this as a mere extension of price in order to catch sellers out before a rejection and a move upwards to channel highs again.
By using pattern separation I have decided that the steeper descending channel has a chance of breaking out and so I plan on entering the market via a buy stop with breakout strategy.
The confluence for this setup is as follows:
- extension of price to trigger stop losses
- steep channel with higher probability of breaking
- strong demand zone acting as support
- potential double bottom
Although price has broken below the structure, I am seeing this as a mere extension of price in order to catch sellers out before a rejection and a move upwards to channel highs again.
By using pattern separation I have decided that the steeper descending channel has a chance of breaking out and so I plan on entering the market via a buy stop with breakout strategy.
The confluence for this setup is as follows:
- extension of price to trigger stop losses
- steep channel with higher probability of breaking
- strong demand zone acting as support
- potential double bottom
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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.