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

UK July CPI Overview

The UK docket has the CPI report, which will be published later this session at 0830GMT. The consumer prices in the British economy are expected to tick higher to 2.7% in July y/y. While core figures, excluding volatile food and fuel costs, are also expected to accelerate slightly to 2.5% in the reported month.

On monthly basis, the consumer prices are expected to arrive at 0%, same as that seen in the month of June.  

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 60 pips in deviations up to 2 to -3, although in some cases, if notable enough, a deviation can fuel movements of up to 75 pips.

 How could affect GBP/USD?

On a positive print, we could see Cable attempt a bounce towards 1.3000 (round number), beyond which 1.3170 resistance area (61.8% Fibonacci expansion of 1.2109-1.3048 up-swing) could be tested, opening doors towards 1.3200 levels.

Conversely, an unexpectedly negative CPI report will cause GBP/USD pair to break below the 100-DMA support located at 1.2925, below which a test of 1.2900 will be imminent.

Key notes

UK: Headline inflation to edge a bit higher to 2.8% in July – TDS

UK CPI and US retail sales amongst market movers today – Danske Bank

About UK CPI

The Consumer Price Index released by the 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 purchase 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).