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GBP/USD Plummets on Thin Trade

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GBP/USD Plummets on Thin Trade

The British pound was lower Monday, as US traders paused for President’s Day.

The GBPUSD pair fell to a session low of 1.6698 before consolidating north of the 1.67 handle. The pair traded at a loss of more than 50 pips, as a dearth of economic data kept the forex market speculating about monetary policy and economic data. Trading at 1.6703 as of 19:30 GMT, the pair’s immediate support is found at 1.6695, followed by 1.6653 and 1.6612. On the upside, technical resistance is ascending at 1.6801, 1.6843 and 1.6823.

The pair surged more than 2 percent last week after the Bank of England said a rate hike is possible in the first half of 2015. Acknowledging the rapid pace of economic expansion in 2013, the central bank upped its growth forecast this year to 3.4 percent.

Several batches of economic data make headlines this week, led by UK consumer inflation. The closely monitored report could show inflation steadied at the BOE’s target of 2 percent in January, according to estimates. The Office for National Statistics will also report on employment figures later in the week. Although the unemployment rate is expected to remain unchanged at 7.1 percent, official data could show declining unemployment levels in the UK labour market. The Office for National Statistics closes out the week with a report on retail sales.

The US data wire picks up Tuesday with the Housing Market Index, a gauge of homebuilder confidence courtesy of the National Association of Home Builders. Markit Group will release manufacturing PMI Thursday. Several other releases, courtesy of the US government, will also make their way through the market, including building permits, housing starts and consumer inflation.

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