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

On the Daily chart above, last week, we correctly anticipated further bearish movement on the GBPUSD pair. Also in accordance with our analysis, price found support around the most recent Daily swing low @ 1.6514 (which we’ve highlighted using the middle blue broken line). While our bias still remains bearish primarily due to the fact that price breached the 1.6514 level, the last trading day’s candle – last week Friday’s candle – did not decisively close below it, hence we still need further confirmation that the bears still have momentum. We would like to see price break below previous trading day’s low – Friday’s low – @ 1.6459 (not highlighted). From a day-trade perspective, we would interpret current price action as a bullish retracement; hence we might have to exercise patience in seeking day-trade selling opportunities. If price eventually breaks below Friday’s low @ 1.6459, we expect the next Daily swing low @ 1.6261 (which we’ve highlighted using the lowest blue broken line) to act as the new crucial support level.

On the H4 chart above, price broke, at that time, the most recent swing low @ 1.6605 (which we’ve highlighted using the upper blue broken line) downward. That automatically sustained our bias in favor of a downward price move. As discussed on the Daily chart, Friday’s low @ 1.6459 (that we’ve highlighted using the lower blue broken line), which is seen on the H4 chart as the most recent swing low, is a level we would like to see price break below to confirm further bearish movement. Again, from a day-trade perspective, price seems to be in a bullish retracement, and as a result, it’s currently a considerable distance away from the 1.6459 level we would like to see it break below. We might have to exercise patience in seeking day-trade selling opportunities.
The white horizontal line @ 1.6674 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, once the coast is clear, we’ll 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.