British Pound Rises Ahead of U.K.’s Inflation Data, 35+ PIP Movement Likely; Jan 20, 2021
U.K. Inflation Updates
U.K. will release CPI, Core CPI data around 0700 GMT/1230 IST. This is considered as 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 actual data comes greater than forecasted, it will be good for sterling.
Let’s see how GBP has reacted during the previous data release:
GBP/USD: The pound strengthens gradually on Wednesday ahead of U.K. CPI, Core CPI data. The pair made intraday high at $1.3658 and low at $1.3622 mark. A sustained close above $1.3661 will test key resistances at $1.3684, $1.3720 and $1.3776 mark respectively. Alternatively, reversal from this will check the key supports at $1.3622, $1.3552 and $1.3490 mark respectively.
Take a look and do trade wisely!