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

On the Daily chart above, we would observe price has been forming new lower highs and lower lows: a formation that fully supports a bearish bias. Last week Thursday, price broke below, at that time, a critical support level @ 1.6165 (that we’ve highlighted using the upper blue broken line), which created an opportunity for the bears to resume their activities. Please NOTE the broken 1.6165 level has since then turned to a good resistance level – preventing upward price movement.
As a result of the broken former support level, we concluded last week our bearish bias had been sustained and we would expect the next critical support at a potential support-confluence of a Weekly swing low @ 1.5982 (which we’ve highlighted on the Daily chart using the lower blue broken line) and the lower edge of the “minor” downward or bearish channel (the red channel) that we’ve been discussing for a while. Today, our bearish bias remains intact. While seeking opportunities to sell, let’s bear in mind the bears might meet certain hurdles around Friday’s low @ 1.6051 (not highlighted). Although price is currently about 50 pips away from it – giving room for potential selling opportunities – more conservative traders might prefer to wait for price-break below it to be more convinced of the bears’ resolve.

On the H4 chart above, price broke, at that time, the most recent swing low @ 1.6109 (which we’ve highlighted using the upper blue broken line) downward. That automatically sustained our bias in favor of a downward price move. The Friday’s low – also the most recent swing low @ 1.6051 (that we’ve highlighted using the lower blue broken line), which we discussed on the Daily chart as a support level to keep in mind is seen on the H4 chart.
The white horizontal line @ 1.6248 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.