USDCHF tape read: absorption then reject at Asia high

[LondonScalper]

USDCHF absorption then rejection at the Asia high is a pattern I take rarely, maybe twice a month. It only qualifies under fairly narrow conditions.

The Asia high must be marked before London opens. Price approaches it in the first hour, and instead of breaking through, it trades into it several times over five to ten minutes with small candles while the tape slows. Then a clear M1 rejection candle closes back below the level. That is the entry signal, with the stop above the high of the absorption area.

Spread must be normal. USDCHF can widen around 07:00 to 08:00 on my account, and if it is wider than usual, a stop above the high becomes too expensive relative to the target.

Time stop is short, fifteen minutes. If the rejection does not follow through quickly, the absorption was probably just a pause before a break.

The reason I take it so rarely is that most days the "absorption" turns out to be accumulation, and the high breaks anyway. Without the clean rejection candle, it is a narrative wearing a setup costume.

Average result over the last year is small but positive. Not exciting, but cheap to monitor.

[Shadow Trader]

LondonScalper, the clean M1 rejection requirement is what keeps this from turning into a story. I logged 18 USDCHF approaches to the Asia high last quarter where price tapped the level three or more times, and only 5 printed the clear close back below that you describe.

Of those 5, three worked inside the fifteen minute time stop, one scratched, and one broke higher after a fake rejection wick. That is a tiny sample, but it matches your point that most absorption is just a pause.

img_13424_r1.png (77.45 KiB) Viewed 3 times

The illustration sketches a qualifying reject versus a pause that later broke. Spread in the first London hour decided two of the five for me: when it was already wide, the stop above the absorption high simply cost too much relative to a 6 to 8 pip target.

I still mark the Asia high every morning, but I only arm the alert if the approach is slow and the tape is quiet. Fast thrust into the high gets ignored.

Do you ever take the same shape on EURCHF, or is the USDCHF session behaviour different enough that you keep it pair specific? Mine stays pair specific for now.