AUD/CHF 1-Hour & 4-Hour Bullish Divergence (Potential Reversal)AUD/CHF is signaling a potential bullish reversal on the 1-hour and 4-hour charts, with a double timeframe bullish divergence between price action and momentum oscillators (RSI and MACD). This setup indicates weakening bearish momentum and a possible upward correction.
Key Observations
4-Hour Chart:
Price Action: Lower lows (LL) in the downtrend.
RSI (14): Higher lows (HL), forming a clear bullish divergence.
MACD: Histogram shows declining bearish pressure; signal line approaching a bullish crossover.
1-Hour Chart:
Price Action: Lower lows (LL) aligning with the broader 4H trend.
RSI (14): Consecutive higher lows (HL), reinforcing divergence on the shorter timeframe.
Support Zone: Price consolidating near a historical support area.
Technical Analysis
Bullish Divergence Confluence:
Divergences on both timeframes strengthen the reversal case. The 4H divergence suggests a larger trend shift, while the 1H chart offers a precise entry trigger.
Price Structure:
A breakout above the descending trendline (connecting recent highs) would validate bullish momentum.
MACD Confirmation:
A bullish crossover on the MACD (4H) would add further conviction.
Trade Setup
Entry Trigger:
Confirm a close above the 1-hour descending trendline (drawn from recent swing highs).
Look for bullish candlestick patterns (e.g., hammer, bullish engulfing) near support.
Targets:
TP1: First major resistance level (e.g., previous swing high).
TP2: Higher-timeframe Fibonacci retracement level (e.g., 61.8% of the recent downtrend).
Stop Loss:
Place SL below the recent swing low to protect against downside volatility.
Risk Management
Limit risk to 1-2% of trading capital.
Trail stops to breakeven once price reaches TP1.
Monitor macroeconomic factors (e.g., SNB policy, AUD risk sentiment).
Conclusion
The alignment of bullish divergences on 1H and 4H timeframes, combined with a key support zone, hints at a potential AUD/CHF reversal. Always wait for price confirmation (e.g., trendline breakout) before entering. Manage risk tightly, as divergences can fail if broader trends persist.
Update charts and set alerts for technical triggers!
Indicator Settings: RSI (14), MACD (12,26,9).
Timeframe Strategy: Use 4H for trend context, 1H for entry precision.
Remember: Divergence signals require confirmation. Trade with discipline! 🚀
