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

On the Daily chart above, since the latter part of last month, we’ve been having what I would consider an interesting price action, which resulted in sort of a channel formation (as observed within the two blue horizontal lines): Price, after failing to breach the, at that time, most recent swing low (not highlighted to avoid cluttered chart), retraced upward, only to meet an uncompromising “veteran” resistance level, which “produced” the most recent Daily swing high @ 1.6132 (that we’ve highlighted using the upper blue broken line). With the stiff resistance, price had to turn around, again, to retest the previous swing low, which, also by now, has “produced” the most recent Daily swing low @ 1.5808 (which we’ve highlighted using the lower blue broken line). Now, price is showing signs that it is not prepared to be sent back upward: the most recent Daily swing low @ 1.5808 has been breached; however, for further bearish move confirmation, we would like to see price to, not only close below the 1.5808 level by the end of today, but also below the lower edge of the downward or bearish channel. In all, with the support of higher time frame charts, our bias is currently bearish; but conservative traders might prefer to wait for today’s candle close to make their final conclusion.
Also, trade volume would most likely be thin today as there’re bank holidays in Japan, US, and Canada; and that might result in unusual or erratic price movements. Please let’s also bear that in mind if we would be trading.

On the H4 chart above, price has broken the most recent swing low @ 1.5857 (which we’ve highlighted using the blue broken line) downward. That automatically shifts our bias in favor of a downward price move. The white horizontal line @ 1.6119 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.