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USD/CHF Might Get Support from Double Bottom Formation

August 9, 2020 (Last updated on August 18, 2020) by

USD/CHF, which is experiencing a very strong bearish trend since March this year, looks to be ready to switch for a rally, albeit temporarily, if the double bottom pattern that we see on the 4-hour chart holds its ground.

On the chart screenshot below, you can see the pattern’s neckline and the two bottoms marked with the yellow horizontal lines. The cyan line marks my entry level situated at 10% of the pattern’s height above the neckline (0.92597). I will place my take-profit at the level marked with the green line, which is situated at 100% of the pattern’s height from the neckline (0.94269). I will set my stop-loss to the low of the breakout candle or to the low of the preceding one if the breakout candle is trading mostly above the neckline. I will ignore bearish breakouts from this setup, which is intended to be a reversal one.

USD/CHF - Double Bottom Pattern on 4-Hour Chart as of 2020-08-09

I have built this chart using the ChannelPattern script. You can download my MetaTrader 4 chart template for this USD/CHF pattern. You can trade it using my free Chart Pattern Helper EA.

Update 2020-08-18: The double bottom pattern has been invalidated by the bearish breakout, which has also transformed it into a kind of a descending triangle:

USD/CHF - Double Bottom Pattern on 4-Hour Chart as of 2020-08-18 - Post-Cancellation Screenshot

If you have any questions or comments regarding this double bottom on the USD/CHF chart, please feel free to submit them via the form below.

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