In classical technical analysis, a double-bottom pattern exists when, after a downtrend, not only are there two identical, or almost identical, lows in price but also that the reaction high between those two bottoms is exceeded. Only then can it be judged as a confirmed double-bottom. If that reaction high subsequently starts to act as support for the market, it increases confidence that the double-bottom is very significant. Such a situation now exists in USD-CHF. The lows in March and May of 0.8699 and 0.8703 were separated by a reaction high on 4 April of 0.8954 with a New York close that day of 0.8921. Since the end of May, the market has been trading almost consistently above those levels with only a few very brief excursions slightly below the 4 April close. Inthis sense, we can say that the reaction high is now acting as support.
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