Hello and welcome back to Cantos Charts. I'm David Jones from spread betting company IG Index and I thought today we'd continue this theme of longer term trends by having a look at a very clear one on GBP/USD.

So this is going back just over a year and the trend that we're in, we can see clearly the trend line there, has supported any weakness over the past 12 months or so and the selloff over recent weeks has brought the currency pair back again to this important support. The big level to watch on the trend line is around about 162 and we did see some strength earlier on this week when markets opened. After that, I think the really big level for this trend are those late May lows coming in around about 159.50, so there really is, on the daily charts at least at the moment, stacks of support for GBP/USD running to 159.50 through to 162.00. So it does, for now, all point to some sort of turnaround I think in the fortunes for the pound against the US dollar and maybe a rally back up through 164.00. But let's take a look at the slightly shorter term chart to see it in a bit more detail.

You can see it maybe a little bit clearer on the short-term charts. So again, what we've got here is a chart going back around about six weeks hourly candlesticks on the pound against the US dollar and we've seen a bit of strength coming in earlier this week ahead of 162, oversold on the RSI again suggesting that maybe this correction has gone too far. So I think in the short-term, we've got the potential to run back up to those highs from earlier this month up around the 164.50, maybe just above that sort of level. It doesn't mean we're going to suddenly see the pound take off like a rocket against the US dollar and I'm sure if we're patient, based on those daily charts, we may well get another retest of the low 162.00. But at the moment, looking at it long-term and medium-term, the risk for any downside for GPB/USD looks to have been vastly reduced I think over the last week or so and we can maybe see it start to gain some ground again.

That's it for me for Cantos Charts. I'm David Jones from spread betting company IG Index and you can follow market updates from me on Twitter. I'm at Davidjones_IG.