Today on GBPUSD – Weekly, Daily and H4 charts support Short trades.

On the Weekly chart above, a major resistance level – a previous swing low @ 1.7050 (that we’ve highlighted using the blue broken line), which we discussed on the Monthly chart during last week Tuesday analysis, did a very solid job of stopping the bulls in their tracks. As we could see, price action last week ended in a reversal candle formation (a hammer). A reversal candle forming around a strong resistance level, after a protracted upward price movement, is a strong signal that price might be reversing downward. Although, price left the fib. 38.2% retracement “station” and is yet to reach the next fib. “station” @ fib. 50% ret., other factors are, currently, overwhelmingly in favor of a downward move.

On the Daily chart above, the bias for downward price move is strengthened further with a Waving negative MACD Divergence (which we’ve identified using the red dashed lines on the upper and lower windows of the trading platform). A Waving MACD Div. becomes a valid divergence only when MACD crosses below its Signal Line; nevertheless, a Waving –ve MACD Div. informs us of the possibility of an imminent price move downward. The demand or upward trend-line is currently about a hundred pips away from current price position; hence we believe there’s still ample room for price downward move – from a day-trade perspective. While we should be wary of a strong support as price moves further downward toward the upward trend-line, let’s also note that, in case price eventually closed below the trend line, further bearish move – in light of other analysis – is strongly expected.

On the H4 chart above, price has broken the most recent swing low @ 1.6649 (which we’ve highlighted using the blue broken line) downward. This automatically shifts our bias in favor of a downward price move. The white horizontal line @ 1.6835 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.

P.S.:
As I’m about posting this analysis, a Short GBPUSD trade set-up seems to be forming on the Hourly chart with initial Stop Loss @ 1.6719; and Primary Profit Target @ 1.6580. If you’re able to identify a strong confluence of resistance, don’t hesitate to take the trade.
However, please remember to keep your risk per trade low: We MUST NEVER assume we KNOW where price is going next!
Also, always keep in mind any major news releases. Be wary of possible price volatility during these periods.