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GBP/USD Surges Above 1.71

The Sterling pound is having a strong start to the week. During the 7/1 European session, we saw UK manufacturing PMI improve faster than expected. The market might not have needed this fundamental boost as GBP/USD was already at new highs on the year, and was challenging the 2009 high of 1.7042. This week, it popped up above 1.71 exposes the 1.7337, 50% retracement of the 2008 decline. 

(gbpusd weekly chart, 7/1)

The weekly RSI is above 70 and could signal to some traders that it is overbought. When you look at the daily chart, and even the 4H chart, they both show the RSI above 70 as we get into the 7/1 US session. We should look out for a pullback in the upcoming sessions, but there is no reason to believe traders won't continue to buy on a dip.

(gbpusd daily chart, 7/1)