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

On the Daily chart above, yesterday, we identified a Daily swing high @ 1.6409 (which we’ve highlighted using the upper blue broken line) as a potential resistance level that might be a “temporarily insurmountable hurdle that would trigger the bearish retracement.” By the close of yesterday’s candle, it became somewhat clear the 1.6409 was ready to do exactly what we expected of it: fueled by the Core CPI report from Britain @ 09:30GMT, yesterday, price surged to pierce the 1.6409 resistance, but didn’t have enough strength to stay above it. Consequently, the bulls were forced to retreat and yesterday’s candle closed as a reversal candle. Early price action today has further confirmed the strength of the 1.6409 resistance as price broke below previous day’s low @ 1.6311 (not highlighted).
However, bearing in mind the possibility of the current bearish move being a bearish retracement, the most recent Daily swing high @ 1.6240 (which we’ve highlighted using the lower blue broken line) is the new support level under focus: given the fact that the 1.6240 support coincides with the fib 38.2% retracement level (drawing the fib from most recent Daily swing low @ 1.5895 to yesterday’s high @ 1.6457), which isn’t shown on the chart to avoid a cluttered chart, there’s a possibility the 1.6240 might stall the bearish retracement.
In all, from a day-trade perspective, our bias has shifted in favor of the bears, but let’s keep in mind the support confluence around the 1.6240 level.

On the H4 chart above, price has broken the most recent swing low – also the previous day’s low @ 1.6311 (which we’ve highlighted using the upper blue broken line) downward. That automatically shifts our bias in favor of a downward price move. The new support level under focus, the 1.6240 level (that we’ve highlighted using the lower blue broken line), which we discussed on the Daily chart, is seen on the H4 chart. Please let’s bear this level in mind.
However, we’re seeing further sign on the H4 chart that’s telling us the current bearish retracement might not be a shallow one: we have a negative MACD Divergence that’s already in place. A MACD divergence is a relatively strong signal.
The white horizontal line @ 1.6457 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.

P.S. Primarily because of the identified 1.6240 support confluence, more conservative trader might opt to refrain from trading this pair for now.