CHF/USD Bullish Cup Formation | Support & Breakout Target Pattern Formation: Bullish Cup & Handle Breakout Setup
The price action on this CHF/USD 1-hour chart exhibits a Cup & Handle pattern, which is a well-known bullish continuation setup. This pattern suggests that buyers are gradually gaining control and a breakout could be imminent.
1️⃣ Understanding the Cup Formation
The cup shape (curved blue line) signifies a gradual accumulation phase, where price initially declined, formed a rounded bottom, and then started recovering.
This indicates that buyers are regaining momentum after a consolidation period.
The lowest point of the cup formed around March 16, from where the price began a steady upward move.
2️⃣ Key Support & Resistance Levels
Support Level: The strong demand zone is established around 1.1300 - 1.1320, as shown by multiple price bounces.
Resistance Level & ATH (All-Time High): The price struggled to break 1.1450 - 1.1470, indicating a major resistance zone where sellers previously took control.
3️⃣ Handle Formation & Pullback
After reaching resistance, the price formed a slight retracement (small descending wedge), which created the handle of the pattern.
The pullback was necessary to clear short-term overbought conditions before a potential breakout attempt.
4️⃣ Trading Strategy & Price Projection
🔹 Entry & Breakout Confirmation
If CHF/USD breaks above 1.1450 - 1.1470 with volume confirmation, this will validate the Cup & Handle breakout.
A confirmed breakout suggests further upside momentum toward 1.1570 - 1.1600, aligning with the pattern’s measured move.
🔹 Stop-Loss Placement
A logical stop-loss should be placed below the handle’s low (~1.1300 - 1.1320), in case of a false breakout or sudden market reversal.
🔹 Target Projection Based on Pattern Measurement
The height of the cup (~200 pips from bottom to resistance) is projected upwards from the breakout level.
This results in a take-profit target of 1.1575 - 1.1600.
5️⃣ Additional Technical Confluences
✅ Trendline Support: The price is respecting an ascending trendline, indicating continued higher lows and bullish sentiment.
✅ Bullish Momentum: The series of higher lows confirms a strong uptrend, favoring buyers.
✅ Potential Fakeout Risks: A failed breakout below 1.1300 could invalidate the bullish outlook, leading to a deeper retracement.
6️⃣ Final Thoughts: Is This a Good Setup?
📌 Overall Bias: Bullish ✅
📌 Breakout Confirmation Needed: Above 1.1450 - 1.1470
📌 Target: 1.1570 - 1.1600 🎯
📌 Risk Management: Stop-loss below 1.1300
If CHF/USD sustains momentum above resistance, traders can anticipate a strong bullish rally toward the projected target. However, it’s essential to wait for confirmation before entering long positions. 📈🔥
