GBP/USD was rejected at the 1.6250 minor psychological resistance yesterday, as pound bulls need to gather more energy before pushing this pair higher.
The pair could retrace to the 50% Fibonacci retracement level on the 1-hour time frame, as it is in line with the previous resistance at the 1.6150 minor psychological level. Stochastic is already in the oversold region, although it has yet to cross upwards, which suggests that the pair could still dip a little lower.
UK manufacturing PMI came in weaker than expected yesterday, adding to selling pressure on the pair, but the ongoing US government shutdown is expected to be dollar negative in the near term.
A long order at 1.6150 with a stop below 1.6100 and a target of 1.6250 would yield a good reward-to-risk ratio.
By Kate Curtis from Trader’s Way