When are the UK CPIs and how could they affect GBP/USD?

The UK March CPIs overview

The cost of living in the UK as represented by the consumer price index (CPI) is due at 0830 GMT. The CPI inflation is expected to decelerate to 0.3% m/m in March with the annual figure seen steadying at 2.7% y/y. The core inflation rate that excludes volatile food and energy items is also expected to tick higher to 2.5% 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?

According to Omkar Godbole, Analyst at FXStreet, “the GBP/USD pair is trading just below the 50-hour moving average (MA) of 1.4310.A move above 1.4338 (resistance on 1H chart) would expose resistance lined up at 1.43454 (resistance on 1H) and 1.4377 (32018 high).”

“On the downside, acceptance below 1.4283 (April 17 low on 1H) could yield a drop to 1.4245 (March 26 high). A violation there would allow a drop to 10-day MA located at 1.4195,” Omkar added.

Key Notes

UK: Headline CPI likely to drop to 2.5% y/y in March - TDS

UK CPI to remain unchanged at 2.7 percent in March – Nomura

European FX Outlook: UK inflation is set to decelerate in March

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).