USDCHF: The Necessary Return to the Manipulation ZoneIn the market, some zones act like magnets, pulling the price back to them. After a powerful move down, USDCHF has left behind a critical manipulation zone—a place where large capital needs to return to close their books before the real trend continues. This analysis is about waiting patiently at that exact spot.
The USDCHF pair continues to be in a global downtrend . After another powerful impulse down on the higher timeframe, the instrument corrected to the 78.6% Fibonacci level of the daily structure. This level, in conjunction with a daily order block, acted as strong resistance and pushed the price down, breaking the 4H corrective structure (BOS).
The interaction with the 78.6% level was accompanied by a manipulation in the form of a new daily order block , with a 4H order block residing inside it. If large capital intends to continue the downtrend, they will first need to close the losing long positions used to conduct the Buy-to-Sell (BTS) manipulation . This makes it a strong Point of Interest (POI) and a magnet for the price.
An additional argument for a short setup forming in this POI is that an untouched daily FVG remains slightly below. The mitigation of this FVG will be the minimum target if a setup is confirmed according to one of the two scenarios, provided the price reaches the POI before this rebalancing occurs.
Two Potential Short Scenarios
SCENARIO 1: Entry from the 61.8% Local Fib
This scenario involves the mitigation of the lower boundary of the daily order block in conjunction with reaching the 61.8% level of the local correction , and a reversal reaction from this confluence.
SCENARIO 2: Entry from the 78.6% Local Fib
If the 61.8% local level is broken, the second scenario comes into play, with the mitigation of the 4H order block in conjunction with the 78.6% level of the local correction , and a reversal reaction from there.
► Invalidation: A break of this level with the price finding acceptance above it would invalidate the short idea from this POI. In that case, the correction on the higher timeframe would continue higher, aiming to capture additional liquidity, at least from the June 19th high, which is also the daily structure's break level.
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The principles and conditions for forming the manipulation zones I show in this trade idea are detailed in my educational publication, which was chosen by TradingView for the "Editor's Picks" category and received a huge amount of positive feedback from this insightful trading community. To better understand the logic I've used here and the general principles of price movement in most markets from the perspective of institutional capital, I highly recommend checking out this guide if you haven't already. 👇
P.S. This is not a prediction of the exact price direction. It is a description of high-probability setups that become valid only if specific conditions are met when the price reaches the marked POI. If the conditions are not met, the setups are invalid. No setup has a 100% success rate, so if you decide to use this trade idea, always apply a stop-loss and proper risk management. Trade smart.
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