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

On the Daily chart above, the bearish retracement we’ve anticipated since Tuesday that was initiated by the resistance level of a Daily swing high @ 1.6409 (which we’ve highlighted using the upper blue broken line), is proving to be a deep retracement. Yesterday, price reacted to, at that time, a potential support level – the most recent Daily swing high @ 1.6240 (that we’ve highlighted using the lower blue broken line), which we discussed the previous day as a “the new support level under focus… that might stall the bearish retracement.” Consequently, the bears were unable to break the 1.6240, and that resulted in yesterday’s low @ 1.6242 – just a couple of pips above 1.6240.
However, earlier today, the bears were able to gather enough momentum to break below the 1.6240 level – automatically breaking the previous day’s low @ 1.6242 in the process. From a day-trade perspective, our bias remains bearish. The next important support level is expected at the upward or bullish trend-line (which is represented by the red dashed line).

On the H4 chart above, price has broken the most recent swing low – also the previous day’s low @ 1.6242 (which we’ve highlighted using the blue broken line) downward. That automatically sustains our bias in favor of a downward price move. The next important support level, the upward or bullish trend-line (represented by the red dashed line), which we discussed on the Daily chart, is also seen on the H4 chart. Let’s have it in mind.
The white horizontal line @ 1.6310 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.