EUR/GBP has sold off in the past few days but the daily time frame seems to suggest that a bounce is in the cards. The pair is currently testing the bottom of the descending channel right around the .8400 major psychological support level.

Stochastic has moved out of the oversold region, suggesting that euro bulls are ready to push the pair back up to the top of the channel or probably just around the middle or its previous highs. A close above the .8400 level could mean that buying pressure is strong and that the pair could climb at least to the .8500 mark.

Going long at market with a stop below the channel or .8300 could be at least a 1:1 trade with a target of .8500. Aiming for the top of the channel around .8600 could be a 2:1 return on risk. 

By Kate Curtis from Trader’s Way