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GBP/USD retains $1.54
There has been consolidation in the $1.5430 region, and the market is not expecting any major swings today as it is Presidents Day in the US.
Sterling made great strides last week to buck the downward trend it has been in against the dollar. We are not expecting any major economic data out of the UK today, but the market is already looking ahead to tomorrow’s CPI report, and the consensus is for a reading of 0.3%.
Mark Carney has already warned that the UK could encounter deflation in the near-term, and he would cut rates if necessary. If the report misses estimates it will put pressure on the pound.
GBP/USD is receiving support at $1.54 and if this level is held it will make $1.55 the initial target. Beyond that traders will look to the 100-day moving average of $1.5524. A move below $1.54 will turn the level into resistance and support will be found in the $1.5340 region; If that mark is punctured $1.53 will be in sight.