Today on GBPUSD – Are the bears ready to take over?

On the Daily chart above, we seem to be getting signals that price is probably set to resume its movement in direction of a strong downward trend – supported by the Weekly and Monthly charts, as well as a number of chart patterns on the Daily chart, which include a head and shoulders formation (as shown). Earlier today, price breached Friday’s low @ 1.6251: a relatively good sign that the bears are ready to resume their activities. From a day-trade perspective, we seem to have the opportunity to short the GBPUSD pair. The most recent Daily swing high @ 1.6119 is a support level we have to bear in mind: the bears might encounter hurdles around this level.

On the H4 chart above, price has breached the most recent swing low @ 1.6251 (which we’ve highlighted using the upper blue broken line) downward. That automatically shifts our bias in favor of a downward price move. The 1.6119 support level, which we discussed on the Daily chart, is also shown on the H4 chart (the lower blue broken line). Price is currently over a 100 pips from this support level; hence, we seem to have enough room to seek Short trades.
The white horizontal line @ 1.6398 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.