How Did CPI Affect The Pound?

How Did CPI Affect The Pound?

2023-10-20 • Actualizada

The Consumer Prices Index including owner occupiers' housing costs (CPIH) is the most comprehensive measure of inflation in the UK. It extends the Consumer Prices Index (CPI) by including owner occupiers' housing costs (OOH) and Council Tax, both significant household expenses not covered by the CPI. The CPI is a widely used inflation measure and is used in the government's inflation target. The Retail Prices Index (RPI) is still published but does not meet the required statistical standards, and changes are planned to integrate CPIH into RPI by 2030. In September 2023, the annual RPI inflation rate was 8.9%. Additionally, the UK Statistics Authority provides tools like a personal inflation calculator and shopping prices comparison to help individuals understand how inflation affects their spending.

GBPUSD - D1 Timeframe

GBPUSDDaily-2010.png

After reacting from the trendline support on the daily timeframe chart as seen above, GBPUSD broke the internal structure and now seems to have completed a retest of the drop-base-rally demand zone that overlaps the trendline. In this case, my expectation is to see a continuation of the bullish movement with the 50-Day moving average as my target.

Analyst’s Expectations: 

Direction: Bullish

Target: 1.23410

Invalidation: 1.20881

GBPAUD - D1 Timeframe

GBPAUDDaily-2010.png

GBPAUD in like manner as was seen on the GBPUSD chart has also reacted from the trendline. The current pullback, however, appears to be aimed at retesting the demand zone that overlaps the trendline support. In line with this expectation, I will patiently wait for price to approach the demand zone before seeking an entry.

Analyst’s Expectations: 

Direction: Bullish

Target: 1.92325

Invalidation: 1.88514

GBPJPY - D1 Timeframe

GBPJPYDaily-2010.png

GBPJPY on the daily timeframe is quite tedious to read, owing to the multiple internal structures to the left of the chart. In this particular case, I will rely on the bullish array of the moving averages as well as the reaction from the trendline support as the basis for my bullish sentiment.

Analyst’s Expectations: 

Direction: Bullish

Target: 184.064

Invalidation: 180.891

CONCLUSION

The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.

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