Tuesday, 22 November 2016

[GBP] Short Bias Still Valid


GBP/USD 4-hour chart, source: forexfactory.com
GBP/USD weekly chart, source: forexfactory.com
Major currency pair GBP/USD rose suddenly on Monday. It jumped from 1.2325s over 1.2500 and it steps back somewhat. The currency pair has been under the downward trend.

U.S. economy news agency, Bloomberg reported that sterling rose as Britain Prime Minister acknowledged calls from Britain’s main corporate lobby group to avoid a “cliff-edge” exit from the European Union this day.

But we need to watch the weekly chart of GBP/USD, and it shows the downward trend of main stream. Its peaks gradually have lowered since 2014 and upward trend since mid October seems temporary adjustment rather than trend turn. Before the trend swings, it has to break the resistance band several times. The game is played between Long and Short.

In four-hour chart, the price of currency pair draws the Head-and-Shoulders pattern though surging price. The pattern is not completed yet, but will be done.

The expected events support the strong dollar. Donald Trump already won the Presidential Election and he speaks 'Strong America' and 'Neoisolationism'. Fed chair Janet Yellen looks to decide to raise Fed Fundamental Rate next month.

I think it is reasonable to hold short bias.

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