USDCHF Retracement Play (Oct 27, 2014)

However, the pair seems to have lost steam and may be due for a pullback to the area of interest.

Using the Fib tool on the latest price swing indicates that the 50% Fibonacci level lines up with the broken resistance near .9475 and the 200 SMA. The 100 SMA has just crossed higher, confirming that an uptrend is starting and that a bounce is likely. Stochastic is almost in the oversold area, which also indicates that buying pressure could return soon.

MACD is giving a different signal though, as the indicator is moving on middle ground and is hinting that selling pressure might still pickup. In that case, USDCHF could make a deeper pullback, possibly until the .9450 minor psychological mark. Increased selling momentum could lead to a drop back to the next support zone at the .9400 mark.

Going long at .9475 with a stop below .9400 might be enough to catch the longer-term rally, if it persists. Short-term traders going for a higher return on risk could opt for a tighter stop just below .9450 and aim for the previous highs at the .9550 minor psychological resistance.

By Kate Curtis from Trader's Way