The British pound was the strongest of the majors on Monday, rallying nearly 2 percent against the Japanese yen and over 1 percent versus the US dollar, as UK economic data was surprisingly strong. UK manufacturing PMI jumped to match the April 2008 high of 50.8 in July from 47.4, but the important part of this was that the index finally rose above 50, which is the point of neutrality, to finally signal an expansion in activity. The data suggests that domestic and foreign demand for manufactured goods in the UK is finally picking up and could eventually help lift the nation out of recession. Looking to GBP/USD, the pair broke above the 2009 highs near 1.6750, and now that the hurdle has been cleared, the door may be open for a further rally toward former support at 1.7500. That said, 60 minute and 240 minute RSI were in overbought territory at the d of the US trading session, and daily RSI was getting very close to those levels as well, suggesting the pair could see a period of consolidation in the near-term.
Related Article: British Pound Weekly Trading Forecast
Al Bawaba
