Trading News Events

- Headline U.S. Consumer Price Index (CPI) to Expand for First Time Since December.
- Core Rate of Inflation to Hold at Annualized 1.8% for Third Consecutive Month.

Trading the News: U.S. Consumer Price Index (CPI)

A rebound in the headline U.S. Consumer Price Index (CPI) may boost the appeal of the greenback and spur a near-term pullback in EUR/USD as it puts increased pressure on the Fed to normalize monetary policy sooner rather than later.

What’s Expected:

Why Is This Event Important:

Signs of stronger price growth may keep the Fed on course to raise the benchmark interest rate later this year, but a continuation of the disinflationary environment may encourage the central bank to retain the zero-interest rate policy (ZIRP) beyond 2015 in an effort to encourage a more sustainable recovery.

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
U. of Michigan Confidence (JUN P)	91.2	94.6
Advance Retail Sales (MoM) (MAY)	1.2%	1.2%
NFIB Small Business Optimism (MAY)	97.2	98.3

Improved confidence along with the rebound in household spending may encourage U.S. firms to boost consumer prices, and a marked rebound in the headline reading may spark a bullish reaction in the dollar as it fuels interest rate expectations.

Risk: Bearish Argument/Scenario

Release	Expected	Actual
Producer Price Index ex Food & Energy (YoY) (MAY)	0.7%	0.6%
ISM Non-Manufacturing (MAY)	57.0	55.7
Personal Consumption Expenditure- Core (YoY) (APR)	1.4%	1.2%

However, subdued input costs paired with the persistent slack in the real economy may continue to drag on price growth, and a dismal CPI print may generate a further near-term advance in EUR/USD as market participants push back for the Fed liftoff.

How To Trade This Event Risk

Bullish USD Trade: U.S. CPI Rebounds 0.1% or Greater

• Need to see red, five-minute candle following the release to consider a short trade on EUR/USD.
• If market reaction favors a bullish dollar trade, sell EUR/USD with two separate position.
• Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward.
• Move stop to entry on remaining position once initial target is hit; set reasonable limit.

Bearish USD Trade: Consumer Price Growth Disappoints

• Need green, five-minute candle to favor a long EUR/USD trade.
• Implement same setup as the bullish dollar trade, just in reverse.

Potential Price Targets For The Release
EURUSD Daily

• Despite the more cautious tone coming out of the Federal Reserve, EUR/USD may continue to face range-bound prices over the near-term as it fails to break out of the monthly opening range.
• Interim Resistance: 1.1510 (61.8% expansion) to 1.1532 (February high)
• Interim Support: 1.0970 (38.2% expansion) to 1.1000 (50% retracement)

Impact that US CPI has had on EUR/USD during the last release

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	PipsChange (End of Day post event)
APR 2015	05/22/2015 12:30 GMT	-0.2%	-0.2%	-144	-165

March 2015 U.S. Consumer Price Index
EURUSD M5: 140 pips price movement by USD - Consumer Price Index news event:

The U.S. Consumer Price Index (CPI) contracted an annualized 0.2% in April, while the core rate of inflation unexpectedly held steady at 1.8% amid forecasts for a 1.7% print. The stickiness the core CPI may keep the Fed on course to remove the zero-interest rate policy (ZIRP) later this year, but fears of a slower recovery may spark a further delay in the normalization cycle as the central bank largely remains ‘data dependent.’ The greenback strengthened following the release, with EUR/USD dipping below 1.1050 to end the session at 1.1008.

--- Written by David Song, Currency Analyst and Shuyang Ren


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- U.S. Durable Goods Orders to Contract for Second Consecutive Month.
- Non-Defense Capital Goods Orders ex Aircrafts to Rebound 0.5%.

Trading the News: U.S. Durable Goods Orders

Another 1.0% contract in demand U.S. Durable Goods may dampen the appeal of the greenback and generate a near-term advance in EUR/USD as ongoing slack in the real economy raises the risk for a further delay in the Fed’s liftoff.

What’s Expected:

Why Is This Event Important:

Fears of a slower recovery may encourage a growing number of Fed officials to adopt a more dovish tone for monetary policy, and we may see the Federal Open Market Committee (FOMC) retain the zero-interest rate policy (ZIRP) throughout 2015 in order to mitigate the downside risks for growth and inflation.

Expectations: Bearish Argument/Scenario

Release	Expected	Actual
Housing Starts (MAY)	-4.0%	-11.1%
Industrial Production (MoM) (MAY)	0.2%	-0.2%
Factory Orders (APR)	-0.1%	-0.4%

The Fed may continue to trim the 2015 GDP forecast amid the mixed batch of data coming out of the U.S. economy, and another contraction in orders for large-ticket items may push the central bank to further delay the normalization cycle in an effort to encourage a stronger recovery.

Risk: Bullish Argument/Scenario

Release	Expected	Actual
Consumer Price Index Core (YoY) (MAY)	1.8%	1.7%
Advance Retail Sales (MoM) (MAY)	1.2%	1.2%
Average Hourly Earnings (YoY) (MAY)	2.2%	2.3%

On the other hand, discounted prices paired with the pickup in private-sector wages may foster greater demand for U.S. Durable Goods, and a positive development may keep the Fed on course to raise the benchmark interest rate later this year as the central bank remains confident in achieving its dual mandate for full-employment and price stability.

How To Trade This Event Risk

Bearish USD Trade: Orders Contract Another 1.0% or Greater

• Need to see green, five-minute candle following the release to consider a long trade on EURUSD
• If market reaction favors a bearish dollar trade, buy EURUSD with two separate position
• Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward
• Move stop to entry on remaining position once initial target is hit; set reasonable limit

Bullish USD Trade: Demand for Large-Ticket Items Exceed Market Expectations

• Need red, five-minute candle to favor a short EURUSD trade
• Implement same setup as the bearish dollar trade, just in the opposite direction

Potential Price Targets For The Release
EURUSD Daily

• Long-term outlook for EUR/USD remains bearish amid the deviation in the policy outlook, but the single currency remains at risk for a relief bounce as European policy makers work to keep Greece within the monetary union.
• Interim Resistance: 1.1510 (61.8% expansion) to 1.1532 (February high)
• Interim Support: 1.0970 (38.2% expansion) to 1.1000 (50% retracement)

Impact that the U.S. Durable Goods report has had on EUR/USD during the last release

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
APR 2015	05/26/2015 12:30 GMT	-0.5%	-0.5%	-22	-53

Orders for U.S. Durable Goods slipped 0.5% in April after expanding a revised 5.1% the month prior, while Non-Defense Capital Goods Orders excluding Aircrafts, a proxy for future business investments, increased 1.0% during the same period amid forecasts for a 0.3% expansion. A deeper look at the report showed demand for Transportation equipment slipped 0.3% during the month, with orders for electrical equipment falling 0.6%, while demand for machinery increased another 1.0% after climbing 0.1% in March. Despite the limited market reaction to mixed batch of data, the greenback gained ground throughout the North American trade, with EUR/USD slipping below the 1.0900 handle to end the day at 1.0869.


--- Written by David Song, Currency Analyst

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- U.S. 1Q GDP to Contract Annualized 0.2%- First Decline Since 1Q 2014.
- Core PCE to Climb Annualized 0.8%- Slowest Since 4Q 2010.

Trading the News: U.S. Gross Domestic Product (GDP)

Another upward revision to the 1Q U.S. Gross Domestic Product (GDP) report may boost the greenback’s appeal and spark a larger decline in EUR/USD as it fuels speculation for the Federal Open Market Committee (FOMC) to remove the zero-interest rate policy (ZIRP) at the September meeting.

What’s Expected:

Why Is This Event Important:

Even though the Fed remains on course to raise the benchmark interest rate in 2015, signs of a slower recovery raises the risk for a further delay in the normalization cycle as the central bank remains in no rush to switch gears.

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
Building Permits (MoM) (MAY)	-3.5%	11.8%
Advance Retail Sales (MoM) (MAY)	1.2%	1.2%
Construction Spending (MoM) (APR)	0.8%	2.2%

The pickup in household consumption paired with the expansion in building activity may generate a strong GDP report, and a positive development may boost interest rate expectations as the Fed prepares U.S. households and businesses for higher borrowing costs.

Risk: Bearish Argument/Scenario

Release	Expected	Actual
Non-Defense Capital Goods Orders ex Aircrafts (MAY)	0.5%	0.3%
Consumer Price Index ex Food & Energy (YoY) (MAY)	1.8%	1.7%
Industrial Production (MoM) (MAY)	0.2%	-0.2%

However, slowing outputs along with the ongoing weakness in business investments may continue to drag on the real economy, and a dismal print may drag on the greenback as it dampens the likelihood for the Fed liftoff at the September 17 meeting.

How To Trade This Event Risk
Bullish USD Trade: U.S. Economy Contracts 0.2% or Less

• Need to see red, five-minute candle following the GDP report to consider a short trade on EURUSD.
• If market reaction favors a long dollar trade, sell EURUSD with two separate position.
• Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward.
• Move stop to entry on remaining position once initial target is hit; set reasonable limit.

Bearish USD Trade: GDP Report Falls Short of Market Expectations

• Need green, five-minute candle to favor a long EURUSD trade.
• Implement same setup as the bullish dollar trade, just in reverse.

Potential Price Targets For The Release
EURUSD Daily

• Lack of momentum to test the May high (1.1465) may highlight a lower-high in EUR/USD; break of the bullish RSI formation to provide conviction/confirmation for a further decline in the exchange rate.
• Interim Resistance: 1.1510 (61.8% expansion) to 1.1532 (February high)
• Interim Support: 1.0970 (38.2% expansion) to 1.1000 (50% retracement)

Impact that the U.S. GDP report has had on EUR/USD during the last release

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
4Q F 2014	03/27/2015 12:30 GMT	2.4%	2.2%	+15	+24

The final 4Q U.S. Gross Domestic Product (GDP) report fell short of market expectations as the economy grew at an annualized rate of 2.2% amid forecasts for an upward revision to 2.4%. In contrast, Personal Consumption was revised higher to 4.4% from an initial forecast of 4.2%, while the core Personal Consumption Expenditure (PCE), the Fed’s preferred gauge for inflation, held steady at an annualized 1.1% to mark the slowest pace of growth since 3Q 2013. Despite the ongoing slack in the real economy, the Fed may stay on course to normalize monetary policy in 2015 as the central bank anticipates a stronger recovery to emerge in the year ahead. The initial market reaction to the mixed batch of data was largely limited as EUR/USD held below the 1.0900 handle, with the pair largely consolidating throughout the North American session to the day at 1.0885.


--- Written by David Song, Currency Analyst and Shuyang Ren

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Originally Posted by TheNews

- U.S. 1Q GDP to Contract Annualized 0.2%- First Decline Since 1Q 2014.
- Core PCE to Climb Annualized 0.8%- Slowest Since 4Q 2010.

Trading the News: U.S. Gross Domestic Product (GDP)

EURUSD M5: 21 pips price movement by USD - GDP news event :

USDJPY M5: 19 pips price movement by USD - GDP news event :

- U.K. 1Q GDP to Expand Annualized 2.5%- Slowest Pace of Growth Since 4Q 2013.
- Will Signs of Stronger Recovery Boost Bets for BoE Rate Hike?

Trading the News: U.K. Gross Domestic Product (GDP)

An upward revision in the U.K. 1Q Gross Domestic Product (GDP) report may heighten the appeal of the British Pound and spur a near-term advance in GBP/USD as it puts increased pressure on the Bank of England (BoE) to normalize monetary policy sooner rather than later.

What’s Expected:

Why Is This Event Important:

Signs of a stronger recovery may spur a growing dissent within the Monetary Policy Committee (MPC) as board member Martin Weale sees scope to raise the benchmark interest rate as early as August, and we may see a growing number of BoE officials adopt a hawkish tone over the coming months should the fundamental developments coming out of the U.K. boost the outlook for growth and inflation.

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
Retail Sales inc. Auto Fuel (MoM) (MAY)	-0.1%	0.2%
Weekly Average Earnings ex. Bonus (3MoY) (APR)	2.5%	2.7%
Industrial Production (MoM) (APR)	0.1%	0.4%

The pickup in private sector consumption along with the expansion in business outputs may generate a strong growth figure, and a marked upward revision may boost interest rate expectations as the BoE remains on course to normalize monetary policy.

Risk: Bearish Argument/Scenario

Release	Expected	Actual
Mortgage Approvals (MAY)	68.8K	64.4K
BBA Loans for House Purchases (MAY)	43.4K	42.5K
Construction Output s.a. (MoM) (APR)	0.1%	-0.8%

However, the slowdown in building activity along with the softening in private-sector credit may lead to a lackluster GDP print, and fears of a slower recovery may drag on the British Pound as it gives the central bank greater scope to retain its wait-and-see approach throughout 2015.

How To Trade This Event Risk
Bullish GBP Trade: U.K. Economy Expands Annualized 2.5% or Greater

• Need to see green, five-minute candle following the GDP report to consider a long trade on GBP/USD.
• If market reaction favors a long sterling trade, buy GBP/USD with two separate position.
• Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward.
• Move stop to entry on remaining position once initial target is hit; set reasonable limit.

Bearish GBP Trade: 1Q GDP Falls Short of Market Expectations

• Need red, five-minute candle to favor a short GBP/USD trade.
• Implement same setup as the bullish sterling trade, just in reverse.

Potential Price Targets For The Release
GBPUSD Daily

• After carving a higher-high in June, will retain a constructive outlook for GBP/USD as long as the RSI retains the bullish momentum carried over from back in April.
• Interim Resistance: 1.5929 (June high) to 1.5940 (61.8% expansion)
• Interim Support: 1.5550 (50% retracement) to 1.5570 (38.2% retracement)

Impact that the U.K. GDP report has had on GBP/USD during the last release

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
4Q F 2014	03/31/2015 08:30 GMT	2.7%	3.0%	+8	+45

The final 4Q U.K. Gross Domestic Product (GDP) report showed an unexpected upward revision in the growth rate, with the economy expanding an annualized 3.0% amid an initial forecast for a 2.7% print. The better-than-expected reading was largely driven by exports, which increased by 4.6% over the last three-months of 2014. Signs of a stronger recovery may encourage the Bank of England (BoE) to adopt a more hawkish tone in 2015, but the committee may continue to endorse a wait-and-see approach over the near to medium-term as the central bank highlights the ongoing slack in the real economy. The initial bullish market reaction was short-lived, with GBP/USD struggling to push above the 1.4800 handle, but the sterling gained ground going into the North American trade, with the pair ending the day at 1.4814.

--- Written by David Song, Currency Analyst and Shuyang Ren

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Originally Posted by TheNews

Trading the News: U.K. Gross Domestic Product (GDP)

An upward revision in the U.K. 1Q Gross Domestic Product (GDP) report may heighten the appeal of the British Pound and spur a near-term advance in GBP/USD as it puts increased pressure on the Bank of England (BoE) to normalize monetary policy sooner rather than later.

GBPUSD M5: 28 pips price movement by GBP - GDP news event :

- U.S. Non-Farm Payrolls (NFP) to Expand 200+K for Third Consecutive Month.
- Unemployment Rate to Fall Back to Annualized 5.4%- Lowest Since 2008.

Trading the News: U.S. Non-Farm Payrolls

Another 230K rise in U.S. Non-Farm Payrolls (NFP) along with a downtick in the jobless rate may heighten the appeal of the greenback and trigger a near-term sell-off in EUR/USD should the data put increased pressure on the Federal Open Market Committee (FOMC) to remove the zero-interest rate policy (ZIRP).

What’s Expected:

Why Is This Event Important:

A further improvement in the labor market may boost bets for a Fed rate hike in 2015 as the U.S. economy approaches ‘full-employment,’ and we may see a growing number of central bank officials adopt a hawkish tone for monetary policy as Chair Janet Yellen remains confident in achieving the 2% inflation target over the policy horizon.

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
Advance Retail Sales (MAY)	1.2%	1.2%
Personal Spending (MAY)	0.7%	0.9%
NFIB Small Business Optimism (APR)	97.2	98.3

The ongoing improvement in business sentiment paired with the pickup in private-sector consumption may generate a marked expansion in U.S. job growth, and a positive development may spur a resumption of the long-term bull trend in the greenback as it boosts interest rate expectations.

Risk: Bearish Argument/Scenario

Release	Expected	Actual
Challenger Job Cuts (YoY) (JUN)	--	42.7%
Housing Starts (MoM) (MAY)	-4.0%	-11.1%
Industrial Production (MoM) (MAY)	0.2%	-0.2%

However, the rise in planned job cuts along with the ongoing slack in business outputs may drag on hiring, and a dismal NFP report may prop up the euro-dollar exchange rate going into the holiday weekend as it raises the risk of seeing a further delay in the Fed’s normalization cycle.

How To Trade This Event Risk

Bullish USD Trade: U.S. Adds 230K Jobs or More; Unemployment Slips to 5.4%

• Need red, five-minute candle following the NFP print to consider a short trade on EUR/USD.
• If market reaction favors a bullish dollar trade, sell EUR/USD with two separate position.
• Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward.
• Move stop to entry on remaining position once initial target is hit; set reasonable limit.

Bearish USD Trade: Employment Report Falls Short of Market Expectations

• Need green, five-minute candle to favor a long EUR/USD trade.
• Implement same setup as the bullish dollar trade, just in reverse.

Potential Price Targets For The Release

EURUSD Daily

• Long-term forecast remains bearish for EUR/USD amid the divergence in the policy outlook, but the pair may continue to consolidate within the wedge/triangle formation from earlier this year as the pair holds above the May low (1.0818).
• Interim Resistance: 1.1510 (61.8% expansion) to 1.1532 (February high)
• Interim Support: 1.0970 (38.2% expansion) to 1.1000 (50% retracement)

Impact that the U.S. Non-Farm Payrolls report has had on EUR/USD during the previous month

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
MAY 2015	06/05/2015 12:30 GMT	226K	280K	-199	-151

EURUSD M5: 179 pips price movement by USD - Non-Farm Employment Change news event:

U.S. job growth picked up in May, with Non-Farm Payrolls(NFP) beating estimates as the economy added 280K jobs following the 221K the month prior. At the same time, the jobless rate unexpectedly increased to an annualized 5.5% from 5.4% as discouraged workers returned to the labor force, with the participation rate expanding to 62.9% from 62.8% during the same period. The ongoing improvement in the labor market may boost expectations for an imminent Fed rate hike, but the central bank may look to further delay the normalization cycle as it struggles to achieve the 2% target for inflation. The greenback strengthened following the better-than-expected release, with EUR/USD dipping below the 1.1100 handle, but the pair consolidated throughout the remainder of the North American trade as it ended the day at 1.1107.

--- Written by David Song, Currency Analyst and Shuyang Ren

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Originally Posted by TheNews

Trading the News: U.S. Non-Farm Payrolls

GBPUSD M5: 78 pips price movement by USD - Non-Farm Payrolls news event :

EURUSD M5: 66 pips price movement by USD - Non-Farm Payrolls news event :

- Bank of England (BoE) Widely Expected to Retain Current Monetary Policy Stance.
- Will BoE Governor Mark Carney Continue to Warn of Higher Borrowing-Costs?

Trading the News: Bank of England (BoE) Interest Rate Decision

The Bank of England (BoE) interest rate decision may offer little relief to recent decline in GBP/USD as the central bank is widely expected to retain its current policy in July, and the committee may continue to endorse a wait-and-see approach amid the growing threat of a Greek exit.

What’s Expected:

Why Is This Event Important:

Heightening uncertainties surrounding the Euro-Zone – the U.K.’s largest trading partner – may prompt the BoE to further delay its normalization cycle, and the British Pound may face additional headwinds in the second-half of the year should Governor Mark Carney highlight a more dovish outlook for monetary policy.

Expectations: Bullish Argument/Scenario

Release	Expected	Actual
Industrial Production (MoM) (MAY)	-0.2%	0.4%
Retail Sales ex Auto Fuel (MoM) (MAY)	-0.2%	0.2%
Average Weekly Earnings ex. Bonus (3MoY) (APR)	2.5%	2.7%

Stronger wage growth along with the narrowing slack in the real economy may encourage the BoE to adopt a more upbeat tone this time around, and the sterling may trade on a firmer footing in the second-half of 2015 should Governor Carney continue to prepare U.K. households and businesses for higher borrowing-costs.

Risk: Bearish Argument/Scenario

Release	Expected	Actual
Mortgage Approvals (MAY)	68.8K	64.4K
Consumer Price Index Core (YoY) (MAY)	1.0%	0.9%
Construction Output s.a. (MoM) (APR)	0.1%	-0.8%

However, the BoE may largely retain its current policy throughout the remainder of the year as the geopolitical risks surrounding the U.K. dampens the outlook for growth and inflation, and the central bank may carry the record-low interest rate into 2016 in an effort to encourage a stronger recovery.

How To Trade This Event Risk

Bullish GBP Trade: BoE to Stay on Course to Remove Record-Low Interest Rate

• Need green, five-minute candle following the decision to consider a long GBP/USD trade.
• If market reaction favors buying Cable, go long GBP/USD with two separate position.
• Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward.
• Move stop to entry on remaining position once initial target is hit, set reasonable limit.

Bearish GBP Trade: MPC Highlights Dovish Outlook for Monetary Policy

• Need red, five-minute candle to favor a short GBP/USD trade.
• Implement same setup as the bullish sterling trade, just in opposite direction.

Potential Price Targets For The Release

GBP/USD Daily

• Failure to preserve the bullish RSI momentum carried over from March raises the risk for a further decline in GBP/USD; break/close below 1.5330 (78.6% retracement) may spark a run at the June low (1.5169).
• Interim Resistance: 1.5550 (50% retracement) to 1.5570 (38.2% retracement)
• Interim Support: 1.5169 (June low) to 1.5180 (23.6% retracement)

Impact that the BoE rate decision has had on GBP during the last meeting

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
JUN 2015	06/04/2015 11:00 GMT	0.50%	0.50%	-33	-72

As expected, the Bank of England (BoE) refrained from releasing a policy statement as the central bank kept the benchmark interest rate steady at 0.50% in June. It seems as though the BoE will stick to the sidelines in 2015 as the committee gauges the margin of slack in the real economy, but Governor Mark Carney may continue to prepare U.K. households and businesses for higher borrowing-costs as the central bank head anticipates a stronger recovery over the coming months. The initial uptick in the sterling was short-lived, with GBPUSD struggling to hold above the 1.5400 handle and ending the day at 1.5357.

More...

- Headline U.K. Consumer Price Index (CPI) to Hold Flat for Third Time in 2015.
- Core Rate of Inflation to Expand Annualized 0.9% for Second Consecutive Month.

Trading the News: U.K. Consumer Price Index

A further slowdown in the U.K. Consumer Price Index (CPI) may generate a near-term pullback in GBP/USD as it puts increased pressure on the Bank of England (BoE) to retain its current policy throughout 2015.

What’s Expected:

Why Is This Event Important:

However, the stickiness in the core rate of inflation may limit the downside risk for the sterling as BoE Governor Mark Carney anticipates faster price growth in the second-half of the year, and the central bank head may continue to prepare U.K. households and businesses for higher borrowing-costs should the fundamental developments show signs of a stronger recovery.

Expectations: Bearish Argument/Scenario

Release	Expected	Actual
Net Consumer Credit (MAY)	1.1B	1.0B
CBI Trends Selling Price (JUN)	--	-7
Producer Price Index- Output n.s.a. (YoY) (MAY)	-1.6%	-1.6%

Lower input costs paired with the slowdown in private-sector credit may encourage U.K. firms to offer discounted prices, and a weak CPI figure may dampen the appeal of the British Pound as it drags on interest rate expectations.

Risk: Bullish Argument/Scenario

Release	Expected	Actual
GfK Consumer Confidence (JUN)	2	7
Retail Sales inc. Auto Fuel (MoM) (MAY)	-0.1%	0.2%
Average Weekly Earnings ex. Bonus (3MoY) (APR)	2.5%	2.7%

Nevertheless, improved confidence along with resilience in household consumption may prompt a strong inflation print, and a positive development may pave the way for a near-term advance in GBP/USD as the BoE remains on course to normalize monetary policy.

How To Trade This Event Risk

Bearish GBP Trade: U.K. Headline & Core CPI Highlight Slower Price Growth

• Need red, five-minute candle following the release to consider a short British Pound trade.
• If market reaction favors bearish sterling trade, short GBP/USD with two separate position.
• Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward.
• Move stop to entry on remaining position once initial target is hit, set reasonable limit.

Bullish GBP Trade: U.K. Inflation Exceeds Market Expectations

• Need green, five-minute candle to favor a long GBP/USD trade.
• Implement same setup as the bearish British Pound trade, just in reverse.

Potential Price Targets For The Release

GBPUSD Daily

• Waiting for a break of the downward trend from June to instill a more bullish outlook for GBP/USD as the RSI fails to retain the bearish momentum.
• Interim Resistance: 1.5630 (38.2% retracement) to 1.5650 (38.2% expansion).
• Interim Support: 1.5330 (78.6% retracement) to 1.5350 (50% retracement).

Impact that the U.K. Core CPI report has had on GBP during the last release

Period	Data Released	Estimate	Actual	Pips Change (1 Hour post event )	Pips Change (End of Day post event)
MAY 2015	06/16/2015 08:30 GMT	1.0%	0.9%	-14	+62

May 2015 U.K. Core Consumer Price Index
GBPUSD M5: 68 pips price movement by GBP - CPI news event:

The U.K. Consumer Price Index (CPI) climbed an annualized 0.1% in May after contracting for the first time since 1960, while the core rate of inflation climbed to 0.9% from 0.8% the month prior to mark the first advance since January. Even though the Bank of England (BoE) remains on course to normalize monetary policy, subdued price growth may encourage the central bank to retain its wait-and-see approach throughout 2015, and the British Pound may face further headwinds over the near to medium-term as the committee remains unanimous in preserving its current policy stance. GBP/USD slipped below the 1.5500 following the mixed CPI print, but the pound-dollar regained its footing during the North American trade to end the day at 1.5646.

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