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

On the Daily chart above, since the beginning of last month (August), we’ve been discussing the possibility of the GBPUSD pair experiencing a protracted downward move. Price action throughout the month of August only strengthened our bias. Currently, there’re quite a number of factors working in favor of a sustained price move downward – both fundamental and technical; but our primary focus is on technical factors: We would observe on the Daily chart that price is in a lower-high-lower-low formation; a previous upward trend-line (the red dashed line) that price broke below about a week ago has been acting as a strong resistance area as price retracement upward was halted twice in that area. A more recent upward trend-line (the red solid line – NOT the bold line) is a new area price seems set to break downward; although we won’t be able to ascertain that until price closes, decisively, below it. However, price has broken the previous month low – the most recent Daily swing low @ 1.6152 (which we’ve highlighted using the blue broken line) downward. That’s another very strong indication that the bears are resolved to hold on to their reign. And, last but not least is the previous day low that price has also breached. In all, we have preponderance of factors supporting a continuous downward price movement.

On the H4 chart above, price has broken the most recent swing low @ 1.6182 (which we’ve highlighted using the blue broken line) downward. That automatically sustains our bias in favor of a downward price move. The white horizontal line @ 1.6374 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.