Today on GBPUSD – Is this currency pair within a major bearish channel?

On the Weekly chart above, we have a clearer picture of the overall market activity. Although, from the Weekly chart’s perspective, it’s currently a bit premature to conclude, we would notice that a possible downward or bearish channel is unfolding. This is indirectly (or directly, as the case may be) telling us that, while the Head and Shoulders formation previously observed on the Daily chart has been virtually nullified, the bears might still manage to pull something out of the bag.

On the Daily chart above, the downward or bearish channel is seen to be more valid as, unlike the weekly chart, the swing points for drawing the channel are already fully formed. Also to be observed is the current price pattern of lower high and lower low – a very strong indication that the bears are currently in charge. From a day-trade perspective, our bias is bearish; however, price is currently around a Daily swing low @ 1.6261 (which we’ve highlighted using the blue broken line), hence the bears might experience some difficulties. Looking toward the left side of the Daily chart, we would notice the 1.6261 level is a critical level as price had reacted to it a number of times in the past.
In all, our conclusion is to seek Short trade setups on the Hourly chart – supported by the H4 chart, while bearing in mind this critical 1.6261 level.

On the H4 chart above, price has broken the most recent swing low @ 1.6496 (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 @ 1.6744 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.