DailyFX.com -

Talking Points:

- EURGBP, GBPCHF post important reversals at recent extremes.

- GBPUSD uptrend since mid-June breaking.

- See the DailyFX Economic Calendar for Tuesday, July 8, 2014.

The British economy heated up at the end of the second quarter, setting the stage for a promising second half of 2014 as well as fervent speculation about the timing of the first Bank of England interest rate hike in the post-global financial crisis, post-Euro-Zone debt crisis era. Private sector growth tracking estimators suggest that UK GDP is on its way to new all-time highs this year. There’s no surprise then why the British Pound has been on such a tear in 2014.

The June UK PMI reports were promising across each the construction, manufacturing, and services sectors, in aggregate pointing to quarterly growth continuing in the +0.7%-+0.9% range in and through the second and third quarters. Individually, each survey reported the best Employment gauges in the 17 year history of the Markit PMI surveys, an indication that the consumption-based British economy is on a firm footing over the medium-term.

Our medium-term assessment for continued economic strength is further underscored by the New Orders component in the three recent PMI sector reports, which were at six-month highs. We highlight these more recent data figures to put in context the quite disappointing May UK Industrial and Manufacturing Production reports from this morning.

See the video above for the short-term technical implications of the weak UK data on EURGBP, GBPCHF, and GBPUSD, as the GBP-crosses form short-term reverals and traders are faced with the question: do I sell the highs or wait to buy the dips?

Read more: Strong June US NFPs Boost Technical Conditions for US Dollar Rally

Related Articles
  1. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  2. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  3. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  4. Investing

    Financial News Comparison: Bloomberg Vs. Reuters

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  5. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
  6. Forex Education

    The Top Uses For P2P Currency Exchange

    Peer-to-peer (P2P) currency exchange networks offer a viable and cheaper alternative for buying and selling currencies.
  7. Forex

    Steps To Open An Offshore Forex Account

    Here is a simple breakdown of how to open an offshore forex account for US-based users, including legal requirements.
  8. Entrepreneurship

    Top Forex Trading Apps

    A brief overview of the top apps that help forex traders with on time information, charts and more.
  9. Investing Basics

    The Risks Of Buying Bitcoin

    Virtual currency is probably here to stay, but what about Bitcoin specifically? Does it have a first-to-market advantage? What are the risks involved?
  10. Forex News

    How The Forex "Fix" May Be Rigged

    When it comes to forex, some types of "fixes" are legal. But some really aren't.
RELATED TERMS
  1. No results found.

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!