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Setting up automatic rollback in CodeDeploy based on CloudWatch metrics is effectively achieved by creating CloudWatch Alarms linked to your deployment group. This approach allows you to specify certain thresholds for application performance metrics, such as error rates or latency. When these metrics exceed predetermined thresholds, the alarm triggers an automated response, which can include rolling back to a previous stable version of your application.

This integration relies on the seamless interaction between CloudWatch and CodeDeploy, enabling a robust monitoring and rollback mechanism that enhances application reliability and uptime. By automating this process, it reduces the risk of human error that can occur during manual monitoring, and it ensures that your application can quickly recover from issues that arise during deployment.

Other options, while they may suggest methods to handle rollbacks, do not offer the same level of automation and integration that CloudWatch Alarms provide directly with CodeDeploy. Manual monitoring would require continuous human oversight, which is impractical and not efficient. Using external monitoring tools can add unnecessary complexity and dependencies, while setting up Lambda functions for rollback actions would require additional development and maintenance overhead compared to the streamlined approach provided by CloudWatch Alarms.