Today on GBPUSD – Waiting for a breakout

On the Daily chart above, we would observe the GBPUSD, more or less, consolidated throughout yesterday – resulting in an “inside candle” reversal candle formation: a scenario where the most recent fully formed candle’s, or, in this case, the previous day’s candle’s high and low are within the penultimate candle’s high and low. The “inside candle” formation further confirms the possibility of a bullish retracement that was probably initiated when price hit the lower edge of the “minor” downward or bearish channel (the red channel) a couple of days ago – precisely Wednesday this week. Again, as it has been alluded to since Wednesday, in the case of a deeper bullish retracement, we expect price to rally toward the upper edge of the bearish channel.
Currently, from a day trade perspective, our bias is shifting to favor the bulls; however, to be further convinced, we would like to see a “breakout” i.e we would like to see price break-above the shorter candle of the “inside candle” formation, which also means price-break above the previous day’s high @ 1.6346 (not highlighted).

On the H4 chart above, to buttress the current consolidation phase on the GBPUSD, we would observe price is yet to break above the most recent swing high – also the previous day’s high @ 1.6346 (which we’ve highlighted using the blue broken line). Based on the method discussed on this thread, we always prefer to see price-break above the most recent H4 swing high – in the case of a bullish bias – to be further convinced of the bulls’ readiness to move.
The downward or bearish channel we’ve been discussing on the Daily chart is also seen on the H4 chart, and that allows us to get a better appraisal of current price action within the channel. The green horizontal line @ 1.6213 highlights the most recent swing low, and as long as price stays above it – in the absence of any new and higher swing low – our bullish or upward bias remains intact.

However, we still need our Hourly charts – using Fibonacci retracement levels and important support levels – to seek promising areas to take our Long positions. Price pattern on the Hourly must also be forming higher highs and higher lows.

Also, PATIENCE is the key here: we need to patiently wait for the Hourly retracement. It might happen, and it might not.