- The UK Inflation Report is crucial for the BOE and therefore for the value of the GBP/USD.
- The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
Buying GBP/USD Scenario
-
Tradable Positive Trigger: +0,78 deviation [BUY Pair]
-
Key Resistance Level: $1.4345
If it comes out at higher than expected with a deviation of +0,78 or higher, the pair may go up reaching a range of 31 pips in the first 15 minutes and 103 pips in the following 4 hours.
The January 25th high of $1.4345 was only recently broken. The $1.4376 level seen on April 17th is the highest since June 2016, when the EU Referendum sent it tumbling down. The pre-referendum gap level of $1.4435 is next.
Selling GBP/USD Scenario
-
Tradable Negative Trigger: -0,74 deviation [SELL Pair]
-
Key Support Level: $1.4245.
If it comes out lower than expected at a deviation of -0,74 or less, the GBP/USD may down reaching a range of 42 pips in the first 15 minutes and 100 pips in the following 4 hours.
$1.4245 was the March peak. Further below, we find $1.4150 which was a mid-February high, followed by $1.4070, a late-March low.
GBP/USD Levels on the Chart
-636595774694052816.png)
More data
In the last five releases, the GBP/USD moved, on average, 34 pips in the 15 minutes after the release and 92 pips in the 4 hours after the release.
The previous release had a surprise of -1.34 in terms of deviation, and the GBP/USD reached a range of 26 pips in the first 15 minutes and 68 pips in the following 4 hours.
The Bank of England has an inflation target of 1-3%. After inflation reached the highs and the Bank raised rates, more rate hikes are on the cards. However, if inflation continues sliding, it may give Mark Carney and co. second thoughts.
UK CPI Preview: With Sterling higher inflation worries wane as rate hike nears
Follow the publication of the figure on the economic calendar. Watch out for the data from the Market Impact tool, projecting the potential price changes according to the deviation. Here is the Market Impact Studies Users Guide.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD hovers around 1.0700 after German IFO data
EUR/USD stays in a consolidation phase at around 1.0700 in the European session on Wednesday. Upbeat IFO sentiment data from Germany helps the Euro hold its ground as market focus shifts to US Durable Goods Orders data.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold price trades with mild negative bias, manages to hold above $2,300 ahead of US data
Gold price (XAU/USD) edges lower during the early European session on Wednesday, albeit manages to hold its neck above the $2,300 mark and over a two-week low touched the previous day.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.