When are the UK CPIs and how could they affect GBP/USD?
|The UK April CPIs Overview
The cost of living in the UK as represented by the consumer price index (CPI) is due later on Wednesday at 0830 GMT.
The headline CPI inflation is expected to arrive at 0.7% inter-month in April while the annualized figure is seen accelerating 2.2%. The core inflation rate that excludes volatile food and energy items is also likely to have ticked higher by 1.9% last month.
Deviation impact on GBP/USD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 15 and 80 pips in deviations up to 2 to -3, although in some cases, if notable enough, a deviation can fuel movements of up to 120 pips.
How could it affect GBP/USD?
“From a technical perspective, the overnight sharp pullback reaffirmed the near-term bearish bias and hence, a follow-through weakness back below the 1.2700 handle is likely to accelerate the slide further towards January swing lows, around the 1.2670-65 area. The near-term bearish trajectory could further get extended towards the 1.2600 neighborhood (1.2610 support zone). On the flip side, any attempted bounce might now confront some fresh supply near the 1.2770-75 region (61.8% Fibo. level of the 1.2396-1.3381 up-move) and is closely followed by the 1.2800 round figure mark,” FXStreet’s Analyst Haresh Menghani notes.
Key Notes
FOMC Minutes and UK inflation amongst market movers today – Danske Bank
GBP futures: Extra losses stay on the cards
UK Labour Spokesperson: It is sensible for May not to put her Brexit deal to a vote
About the UK CPI
The Consumer Price Index released by the Office for National Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of GBP is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as positive (or bullish) for the GBP, while a low reading is seen as negative (or Bearish).
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