USD/CHF 4H – Pullback Into Supply Zone for Potential Reversal

🧠 USD/CHF 4H – Pullback Into Supply Zone for Potential Reversal

USD/CHF has been trading within a well-defined bearish structure over the past few weeks. Price action continues to respect lower highs and lower lows, with multiple short-term supports (SS) consistently being broken — confirming sustained selling pressure.

🔍 Market Structure & Smart Money Perspective

* A clear Break of Structure (BOS) early in the chart shifted market sentiment to bearish.
* Since then, the market has formed several short-term support levels, each broken successively.
* This confirms that bears are in control, and any rallies are likely corrective rather than a trend reversal — unless a new BOS to the upside forms.

🧱 Supply Zone Analysis

* The marked supply zone around 0.83100 – 0.84000 is the last institutional distribution zone before the significant drop.
* Price is currently retracing aggressively into this premium zone, following a likely liquidity sweep of the previous lows.
* This reaction is typical of smart money behavior — sweeping liquidity before initiating a retracement to mitigate orders or fill imbalances.


📈 Current Price Action

* The large bullish impulse may seem like a shift in momentum, but without a confirmed break of major structure, this is viewed as a pullback into premium pricing.
* We anticipate that price will react to the supply zone, presenting a high-probability shorting opportunity.

📌 Trade Idea

* Bias: Bearish (pending confirmation from supply)
* Entry Zone: 0.83100 – 0.84000
* Stop Loss: Above 0.84000 (to cover potential liquidity spikes)
* Take Profit: 0.78738 (prior demand zone)
* Risk-to-Reward: Approx. 1:4+

🧠 Confirmation Triggers to Watch For:

* Bearish engulfing candlesticks within supply
* Internal BOS on lower timeframe (LTF)
* Fair Value Gap (FVG) formation and reaction
* Weak bullish momentum/tap-and-reject from zone

📌Conclusion

This setup aligns with the Smart Money Concept framework. As long as price remains below the supply zone, my bias remains short. I’ll wait for lower timeframe confirmation before executing the trade.

⚠️ Always manage risk — this is a zone of interest, not an automatic sell. Let price show its hand.