The UK March CPIs Overview
The cost of living in the UK as represented by the consumer price index (CPI) is due later on Wednesday at 0930 GMT.
The headline CPI inflation is expected to arrive at 0.3% inter-month in March while the annualized figure is seen accelerating 2.0%. The core inflation rate that excludes volatile food and energy items is likely to have ticked 1.9% higher 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?
“Despite the recovery, the short-term outlook remains neutral, as the pair is still trapped in a falling wedge - a bullish reversal pattern. A daily close above the wedge resistance, currently at 1.3106, would confirm the bullish reversal and open the doors to re-test of the previous month's highs near 1.3380. The bull breakout looks likely as the demand for GBP put options (bearish bets) has dropped sharply this month. That said, the prospects of bull breakout would weaken if the spot finds acceptance below the March 29 low of 1.2967,” FXStreet’s Analyst Omkar Godbole notes.
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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