Today on GBPUSD – Daily and H4 charts support Short trades, but…

Pls NOTE: On the Weekly chart (please refer to yesterday’s analysis), the reversal candle that formed around a strong resistance level is still doing a good job of sustaining our bias for a downward price move.

On the Daily chart above, continuing from where we stopped our analysis yesterday, as envisaged, price travelled down to the demand or upward trend line, which is currently doing a nice job of holding the bears. Although, price seems set to continue its bearish move, the previous day low @ 1.6430 (which we’ve highlighted using the lower blue broken line) is a support level we would like to see price break downward for a stronger SELL signal. The Waving negative MACD Divergence (that we’ve identified using the red dashed lines on the upper and lower windows of the trading platform), which we also discussed yesterday, is still intact. MACD has crossed below its Signal Line. It becomes a valid -ve MACD Div. if it closes below its Signal Line by the end of today. If that happens – with the current situation on the Weekly chart – we should be fully prepared for a possible sustained downtrend that might last for days, weeks, or longer.

On the H4 chart above, yesterday, price broke, at that time, the most recent swing low @ 1.6649 (which we’ve highlighted using the upper blue broken line) downward. That automatically shifted our bias in favor of a downward price move. To strengthen the argument for a continuing downward move, the H4 chart gives us a clearer view of price action around the demand trend line that we discussed on the Daily chart: as seen on the H4 chart, the demand trend line seems to have turned to a resistance level preventing price reversal upward.
However, as we also noted on the Daily chart, the previous day low – that is also seen on the H4 chart as the most recent swing low @ 1.6430 (which we’ve highlighted using the lower blue broken line) is a support level we would like to see price break downward for a stronger SELL signal. The white horizontal line @ 1.6717 highlights the most recent swing high, and as long as price stays below it – in the absence of any new and lower swing high – our bearish or downward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important resistance levels – to seek promising areas to take our Short positions. Price pattern on the Hourly must also be forming lower highs and lower lows. Please note that our aim is to sell a rally in today’s down-trend.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.