USD/CHF is currently testing a major support level, as can be seen on the longer-term time frames. This is in line with the .8900 major psychological level which has held for the past few months. Stochastic has reached the oversold region, indicating a potential bounce.

At the same time, a spinning top candlestick has formed right on the support level. A close above the spinning top’s high for the next daily candle could confirm the potential rally.

Setting a buy stop order above that high with a stop below the previous spike to the .8800 handle and a target near the previous highs around .9100 could yield a good return on risk for a longer-term trade.

By Kate Curtis from Trader’s Way