GBP/USD is still on an uptrend on the 4-hour time frame, as can be seen on the rising channel on the chart. The pair is selling off but might be ready to find support at the bottom of the channel.
Stochastic is already moving out of the oversold region though, which indicates that pound bulls are ready to push the pair back up. Going long at the bottom of the channel around the 1.6400 major psychological level with a tight stop below the channel and a target at the top of the channel could yield a high return on risk.
Moving the stop to entry once price reaches the middle of the channel around 1.6550 can help reduce exposure and protect profits in case price reverses.
By Kate Curtis from Trader’s Way