Today on GBPUSD – Daily and H4 charts support Short trades.

On the Daily chart above, since late last year we’ve been monitoring price behavior within two downward or bearish channels: a “minor” channel (the red channel) which is seen within a “major” channel (the faint gray channel). The minor bearish channel, for quite a while now, has been doing a very good job of guiding price’s upward and downward moves. Yesterday, price hit the upper edge of the “minor” bearish channel, reversed rather sharply and consequently closed as a reversal candle formation. That price action signaled a strong possibility of the bears resuming their action in an overall or longer term bearish trend. Further buttressing the bears resolve is earlier price action today, which resulted in price breaking below the previous day’s low @ 1.6056 (not highlighted). From a day-trade perspective, our bias is now in favor of the bears. The coast seems clear enough for us to seek Hourly Short trade setups – supported by the H4 chart.
We expect the next important support level to be the lower edge of the “minor” bearish channel.

On the H4 chart above, price has broken the most recent swing low @ 1.6056 (which we’ve highlighted using the blue broken line) downward. That automatically sustains our bias in favor of a downward price move.
The white horizontal line @ 1.6240 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.