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GBP/USD forex signal - U.S. CPI - 13 Mar 2018

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The monthly U.S. consumer price index data will be released today at 12:30 GMT. According to the economists polled, headline CPI is forecast to rise 0.2% on the month. This marks a slower pace of increase in inflation from 0.5% registered in January.

On a year over year basis, headline CPI is expected to slightly edge higher to 2.2%, up from 2.1% increase seen in the previous month. Core CPI, which strips the volatile food and energy prices is forecast to also rise 0.2% on the month. This marks a slower pace of increase compared to the 0.3% increase registered in January.

Overall, the monthly gain is expected to keep the annual core inflation rate steady at 1.8% compared to the same period a year ago. The data comes ahead of next week's FOMC meeting where interest rates are more likely to rise.

Alongside the data from the U.S. the UK government will be releasing its annual budget statement today. The data is unlikely to make a major impact on the British pound but investors will be closely looking at the budget in the backdrop of the UK's Brexit theme that is still unfolding.

Based on the above, the forex signal of the day is GBPUSD. With two important events lined up the British pound is expected to exhibit some volatility heading into the day. Yesterday, the GBPUSD was seen consolidating near the resistance level of 1.3902 before reversing the short term gains.

We are looking to short GBPUSD at 1.3887 targeting 1.3800 which marks the previous low while placing stops around 1.3930 as we expect to see the retest of the resistance level pushing the currency pair to close lower on the day.

forex signal gbpusd 13 mar 2018

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion. All risks and coasts associated with online trading are your responsibility.