Trade of the Day: GBP/USD

By: Dima Chernovolov

GBP/USD continues to rise after breaking the 4-hour Down Channel chart pattern which was recently identified by Autochartist. Autochartist measures the quality of this Down Channel at the 6-bar level – which is the result of the strong Initial Trend (10 bars), below-average Uniformity (5 bars) and significant Clarity (8 bars). GBP/USD is expected to rise toward the forecast price 1.2976 – in line with the earlier upward reversal from the support area shown below.

As can be seen from the daily GBP/USD chart below, the price earlier reversed up from the support area lying between the pivotal support level 1.2800 (former support from June), lower daily Bollinger Band and the 50% Fibonacci retracement of the upward impulse from May. The proximity of this support area and the oversold daily Stochastic add to the probability GBP/USD will continue to rise toward the forecast price 1.2976.