U.K. CPI & Core CPI Data
U.K. will release inflation data at 0700 GMT/1230 IST. This is considered the UK’s most important inflation data because it’s used as the central bank’s inflation target. Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate. Here the average price of various goods and services are sampled and then compared to the sampling done a year earlier. If the actual data comes higher than forecasted, it will be good for U.S. dollar. Along with CPI results, U.K. will release PPI input, PPI output and RPI data too. In case of mixed data, market volatility is expected.
Let’s see how GBP has reacted during the previous data release:
GBP/USD: The pound trades marginally lower and stabilizes below $1.39 mark ahead of U.K.’s inflation data. The pair made intraday high at $1.3908 and low at $1.3861 mark. A shooting start pattern has observed on a Day Chart which simply signifies short term trend reversal likely. A sustained close above $1.3902 on H1 chart requires for the upside rally. Alternatively, current downside trend will drag the parity back below $1.3800 mark.
Key Resistances: $1.3902, $1.3951, $1.4001, $1.4032
Key Supports: $1.3862, $1.3845, $1.3767, $1.3738
Take a look and do trade wisely!