How will the UK CPI affect the pound

<p>Very choppy week in FX; the ranges are winning without showing a continuous direction as of yet.  GBP/USD has been trading between 1.6125 and 1.6050, […]</p>

Very choppy week in FX; the ranges are winning without showing a continuous direction as of yet.  GBP/USD has been trading between 1.6125 and 1.6050, currently at the lower end of the range after a fall from yesterday. Today the pound will be tested with CPI data due out expected at 1.4%, a slight drop from the last at 1.5%, so more than likely this has been priced in until the actual data comes out.  If a weaker read does come in there will start to be concerns on the rate hike that was expected early next year. If stronger, it will put the bulls back in charge with hikes looking more certain.

The euro has been strong this week, starting off as low as 1.2618 to a high of 1.2768 yesterday. It’s had a pull back so far in overnight trading as the profit takers come in to play now just holding above 1.2700.  The German ZEW Economic statement will be released today, a leading indicator of economic health, expected at 0.2 from last 6.9. This will be helping the euro lower as this data is awaited to come out, so a very weak bit of data from the main Eurozone state. Overnight data is a market mover with the Chinese CPI data expected at 1.7% a drop from 2%, normally has a negative effect on the Asian currency if is weaker than expected.



Supports 1.2700 1.2685 1.2650    | Resistance 1.2775 1.2860 1.2900



Supports 107.10 106.80 106.65    Resistance 107.50 107.75 108.20



Supports 1.6050 1.6020 1.5995   Resistance 1.6100 1.6130 1.6160



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