GBP/USD suffered a sharp selloff on Friday but it appears that the longer-term uptrend is still intact, as evidenced by the rising channel on the 4-hour time frame.
The pair is hovering around the middle of the channel around the 1.6050 minor psychological support while stochastic is already in the oversold region. The stochastic hasn’t crossed upwards yet so a deeper slide might be in the cards.
The pair still has a chance at testing the channel support around the 1.5900 major psychological support before resuming its climb. A long order at 1.5900 with a 100-pip stop and a target of the previous highs around 1.6250 would yield a 3.5-to-1 return on risk.
By Kate Curtis from Trader’s Way