Strong Pound?

GBP/USD daily chart, source:forexfactory.com

One of the major currency pair, GBP/USD continues its upward trend since March in which Pound rebound from the bottom. Though it faced the adjustment in the rally several times, it raised bottoms. And it is under the adjustment again. We need to watch the market whether it continues the rally or turns its direction to down.

GBP/USD 4-hour chart, source:forexfactory.com

In the 4-hour chart, GBP/USD made the downward trend after it dropped the peaks after recording highest peak in mid term. When we watch only 4-hour chart, it seems that the cable keeps short position against Dollar. But the daily chart tells the margin of the rise and it rallies in 1-hour chart yet. the currency pair raises peaks and bottoms and repeats the adjustment and rising in the 1-hour chart.

Then it may be reasonable to keep the long bias about GBP/USD. But we need to concern the foreign exchange market itself not in technical analysis. FOMC, U.S. Federal Open Market Comittee think the raise of the Federal Fund Rate yet according to the meeting minutes of April opened on Wednesday. Though the governors in Europe banks such as European Central Bank and Bank of England noticed the no raise of interest rate, the U.S. Fed implies its benchmark rate's raise. In the early year, Feb spoke that it would not hurry the action due to the global depression but the meeting minutes confirmed that the possibility is remained available. U.S. New York Federal Reserved President William Dudley spoke that strong U.S. economy state made the margin of the raise.
 GBP/USD 1 HOUR chart, source:forexfactory.com

U.S. Fed's decision to hike is the main fact of dropping the cable. But in the chart Pound rallies against US Dollar yet. In this point the technical analysis and the fundamental analysis clash each other. When this situation the decision is trader's job. I anticipate the strong Dollar not Pound and suggest the neutral position on Pound.

It's up to traders to expect what the direction of Pound goes. But it need to be prepared the opposition situation's appearance. The risk management is prior to forecast the currency direction, I want to tell.