GBP/USD to Eye Monthly High on Above-Forecast U.K. CPI

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

SEP

2017

10/17/2017 08:30:00 GMT

3.0%

3.0%

-25

-90

September 2017 U.K. Consumer Price Index (CPI)

GBP/USD 5-Minute Chart

The U.K. Consumer Price Index (CPI) climbed an annualized 3.0% in September to mark the fastest pace of growth since 2012, while the core rate of inflation held steady at 2.7% per annum for the second-month. A deeper look at the report showed prices for clothing & footwear advanced 3.9% on a monthly basis, with food prices also increasing 0.8%, while transportation costs narrowed 1.3% after rising 1.0% in August.

The British Pound struggled to hold its ground following the batch of in-line prints, with GBP/USD slipping below the 1.3200 handle during the North American trade to end the day at 1.3189. Interested in trading the U.K. CPI report but don’t have a plan? Download and review the DailyFX Advanced Guide for Trading the News for FREE to learn our 8 step strategy.

GBP/USD Daily Chart

  • GBP/USD remains confined by the monthly opening range, but the broader outlook remains constructive especially as both price & the Relative Strength Index (RSI) break out of the bearish formations carried over from September.
  • Lack of momentum to test the October-low (1.3027) may spur a test of the November-high (1.3321), with a closing price above the Fibonacci overlap around 1.3300 (100% expansion) to 1.3320 (38.2% retracement) raising the risk for a move back towards 1.3370 (78.6% expansion), which sits just below the October-high (1.3402).
  • However, break/close of the monthly-low (1.3040) brings the Fibonacci overlap around 1.2950 (23.6% expansion) to 1.2960 (78.6% retracement) back on the radar, with the next downside region of interest coming in around 1.2800 (50% expansion) to 1.1860 (61.8% retracement).

Want more insight with all the major events on tap this week? Join DailyFX Currency Analyst David Song LIVE for an opportunity to cover key market themes along with potential trade setups!

— Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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