The UK June 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 0.0% inter-month in June while the annualized figure is seen steady at 2.0%. The core inflation rate that excludes volatile food and energy items is likely to have ticked slightly higher to 1.8% 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?
The recovery in GBP/USD lost legs near 1.2420 region, as the sellers returned in early Europe, knocking-off the rates to fresh 27-month lows of 1.2383, where it now wavers.
“From a technical perspective, the overnight slide confirmed a fresh bearish breakdown and might have already set the stage for a move towards challenging support marked by the lower end of a four-month-old descending trend-channel, currently near the 1.2365 region. With technical indicators moving on the verge of breaking into the oversold territory, bearish traders are more likely to take a brief pause, or even opt to cover their short positions near the mentioned support. Meanwhile, any attempted bounce now seems to confront some fresh supply near the 1.2465-70 horizontal zone, above which a fresh bout of short-covering should assist the pair to reclaim the key 1.2500 psychological mark,” FXStreet’s Analyst Haresh Menghani 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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