When is UK CPI and how could affect GBP/USD?

UK April 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 accelerate to 2.6% in April y/y. While core figures, excluding volatile food and fuel costs, are also expected to arrive stronger at 2.2% in the reported month versus 1.8% previous.

On monthly basis, the consumer prices are expected to remain unchanged at 0.4% 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 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 CPI print, we could see cable break above 1.2950 barrier, beyond which 1.2961 (May 9 high) could be tested, opening doors for a test of 1.2990/1.3000 (7-week high/ key psychological level).

Conversely, a downside surprise will cause GBP/USD pair to break below 1.2894 (5-DMA), leading to a subsequent break below 1.2842/29 (May 12 & 4 low) is likely to drag the pair towards testing its next support near 1.2800 (key support).

Key notes

UK: Headline inflation to pick up to 2.8% y/y in April – TDS

UK CPI and German ZEW in focus 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).