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

On the Daily chart above, after a bullish retracement that lasted virtually throughout last week, price seems set to continue its southward journey. After completing an “inside candle” formation on Friday, and retracing upward, yesterday, to close up a “weekend gap” (a gap caused by the difference between Friday’s close @ 1.6455 and Monday’s open @ 1.6404), price ended up forming another “doji” candle by the end of yesterday, which suggested to us that traders, again, were battling with indecision. However, early price action today gave us an indication that the overall bearish bias is holding as price broke below yesterday’s low @ 1.6327 (not highlighted). However, the bears are not out of the woods yet: we have a strong support level – the most recent Daily swing low @ 1.6249 (which we've highlighted using the lower blue broken line). More conservative traders might prefer to see price break below this 1.6249 support before seeking any Hourly Short trade set-up.

On the H4 chart above, price has broken the most recent swing low – also yesterday’s low – @ 1.6327 (which we’ve highlighted using the upper blue broken line) downward. That automatically sustains our bias in favor of a downward price move. The 1.6249 strong support level (the lower blue broken line), which we discussed on the Daily chart, is shown on the H4 chart. Please let’s be conscious of this level.
The white horizontal line @ 1.6476 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, whether we decide to wait for the 1.6249 break or not, 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.