Trade Setup Details for USD/CHF (4H Chart)
Overview
Pair: USD/CHF (US Dollar / Swiss Franc)
Timeframe: 4H (4-hour chart)
Date of Analysis: April 23, 2022
Current Price: 0.82920 (as shown on the chart)
Market Sentiment: Bullish (indicated by "Bullish Divergence" on the RSI)
Trade Setup
Trade Type: Buy
Entry Point: 0.82792
The entry is marked just above the recent low, suggesting a potential reversal after the price broke below a descending trendline and retested a key support zone around 0.82790–0.82960.
Stop Loss: 0.80312
The stop loss is placed below the recent swing low, providing a buffer against further downside. This gives a risk of approximately 248 pips from the entry point.
Take Profit: 0.85265
The take profit is set at a key resistance level, aligning with previous highs around 0.85265. This offers a potential reward of approximately 247 pips from the entry point.
Risk-to-Reward Ratio: Approximately 1:1 (247 pips reward / 248 pips risk)
Technical Analysis
Price Action: The price has been in a downtrend, as indicated by the descending trendline. However, a break below this trendline followed by a retest suggests a potential reversal. The price is now approaching a key support zone between 0.82790 and 0.82960.
Support/Resistance:
Support: 0.82790–0.82960 (recent price action shows a bounce from this zone).
Resistance: 0.85265 (previous high, marked as the take profit level).
Indicators:
RSI (Relative Strength Index): The RSI is at 52.61, showing neutral momentum. However, a "Bullish Divergence" is noted, where the price made a lower low, but the RSI formed a higher low, indicating weakening bearish momentum and a potential reversal.
The RSI is also trending upward, supporting the bullish outlook.
Trendline: The descending trendline (drawn on the chart) has been broken, and the price is retesting this breakout area, which often acts as support after a breakout.
Trade Rationale
The setup is based on a combination of price action and technical indicators:
The break of the descending trendline suggests the downtrend may be losing steam.
Bullish divergence on the RSI indicates a potential reversal, as momentum shifts in favor of buyers.
The price is approaching a key support zone, which has historically held, increasing the likelihood of a bounce.
The take profit at 0.85265 aligns with a significant resistance level, providing a logical target for the trade.
Risk Management
The stop loss at 0.80312 ensures that the trade is invalidated if the price continues to decline significantly, protecting against larger losses.
Traders should consider position sizing to ensure the 248-pip risk aligns with their risk tolerance (e.g., risking 1–2% of their account on this trade).
Additional Notes
Monitor for confirmation of the reversal, such as a strong bullish candlestick pattern (e.g., engulfing or pin bar) at the support zone.
Be cautious of any fundamental news (e.g., US or Swiss economic data) that could impact USD/CHF volatility during the trade.
Overview
Pair: USD/CHF (US Dollar / Swiss Franc)
Timeframe: 4H (4-hour chart)
Date of Analysis: April 23, 2022
Current Price: 0.82920 (as shown on the chart)
Market Sentiment: Bullish (indicated by "Bullish Divergence" on the RSI)
Trade Setup
Trade Type: Buy
Entry Point: 0.82792
The entry is marked just above the recent low, suggesting a potential reversal after the price broke below a descending trendline and retested a key support zone around 0.82790–0.82960.
Stop Loss: 0.80312
The stop loss is placed below the recent swing low, providing a buffer against further downside. This gives a risk of approximately 248 pips from the entry point.
Take Profit: 0.85265
The take profit is set at a key resistance level, aligning with previous highs around 0.85265. This offers a potential reward of approximately 247 pips from the entry point.
Risk-to-Reward Ratio: Approximately 1:1 (247 pips reward / 248 pips risk)
Technical Analysis
Price Action: The price has been in a downtrend, as indicated by the descending trendline. However, a break below this trendline followed by a retest suggests a potential reversal. The price is now approaching a key support zone between 0.82790 and 0.82960.
Support/Resistance:
Support: 0.82790–0.82960 (recent price action shows a bounce from this zone).
Resistance: 0.85265 (previous high, marked as the take profit level).
Indicators:
RSI (Relative Strength Index): The RSI is at 52.61, showing neutral momentum. However, a "Bullish Divergence" is noted, where the price made a lower low, but the RSI formed a higher low, indicating weakening bearish momentum and a potential reversal.
The RSI is also trending upward, supporting the bullish outlook.
Trendline: The descending trendline (drawn on the chart) has been broken, and the price is retesting this breakout area, which often acts as support after a breakout.
Trade Rationale
The setup is based on a combination of price action and technical indicators:
The break of the descending trendline suggests the downtrend may be losing steam.
Bullish divergence on the RSI indicates a potential reversal, as momentum shifts in favor of buyers.
The price is approaching a key support zone, which has historically held, increasing the likelihood of a bounce.
The take profit at 0.85265 aligns with a significant resistance level, providing a logical target for the trade.
Risk Management
The stop loss at 0.80312 ensures that the trade is invalidated if the price continues to decline significantly, protecting against larger losses.
Traders should consider position sizing to ensure the 248-pip risk aligns with their risk tolerance (e.g., risking 1–2% of their account on this trade).
Additional Notes
Monitor for confirmation of the reversal, such as a strong bullish candlestick pattern (e.g., engulfing or pin bar) at the support zone.
Be cautious of any fundamental news (e.g., US or Swiss economic data) that could impact USD/CHF volatility during the trade.
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.
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.