GBP/USD is still on a steady downtrend on its 1-hour time frame, as the pair is moving below a falling trend line connecting its recent highs for the month.

The pair appears to have bounced off the 1.5200 major psychological support, but this might just mean that a correction is in the works. If that’s the case, the pair could pull up to the Fib levels which are in line with the trend line.

In addition, the 50% Fib seems to be in line with a former support area, which could act as resistance from now on. Stochastic is still climbing, suggesting that there’s enough upward momentum to push for a retracement.

Shorting around the 1.5300 area with a tight stop and a target of 1.5200 would yield a good reward-to-risk ratio for a day trade.

By Kate Curtis from Trader’s Way