USD/CHF Range Setup (May 13, 2014)
USD/CHF has made a strong rally after bouncing off support on its 4-hour range. The pair has been moving sideways between the .8750 minor psychological level and the resistance around .8925.
The rally could be cut short once the pair tests the top of the range with stochastic already deep in the overbought zone. A selloff from .8925 could last until the bottom of the range or until the middle at .8825 to .8850.
Shorting at .8925 with a tight 50-pip stop and a 175-pip target to the range support could yield a 3.5-to-1 return on risk. Adding another position at the middle of the range and trailing the stop could improve the reward ratio.
[I]By Kate Curtis from [URL="http://www.tradersway.com"]Trader's Way[/URL][/I]