Sterling has been the best performing currency since the beginning of the week, among the Major currencies. It has rallied more than 200 pips. This can be attributed to the post-election effect of the unexpected Conservative Victory. This morning’s rally can be said to be due to economic data: Manufacturing production and industrial production which all came out positive. The Gilt yield can also be an important fact fuelling GBP upward moves.
Technically, GBPUSD broke the 1.5520 and 1.5610 level and opened above the 200MA. This signals potential upward moves for GBPUSD.
However, we have to put into consideration more economic data to come from UK and US over the week. This might actually impair the direction of GBPUSD either way.