The UK inflation report for March was released a while ago. At first glance, the report seems positive overall, although I´m getting some mixed numbers from different sources.
The first place I looked at for the CPI (consumer price index) number, showed a 2.3% yearly inflation, but I wanted a second opinion from another source and that second source shows the yearly inflation number at 1.8% vs. an expected 1.9%. That´s quite a deviation if we compare them to each other, so let me check a few other sources.
Anyway, monthly inflation jumped to 0.4% from an expected number of 0.3%, RPI (retail price index) lost one point and PPI (producer price index) showed a 0.4% increase.
Ok, so after clearing my head, I see that the 1.8% number is the annualized core CPI. So, this is a mixed report but it leans slightly to the positive side.
GBP/USD jumped about 40 pips immediately after the release, but after touching a number of moving averages on the H1 forex chart, the price turned back down just as quickly.
The moving averages did a good job in limiting the move up.
In the previous update, we gave a trade idea: we said that we would sell this forex pair on a spike if the numbers were positive. That´s because inflation is not that important right now for the UK economy or the BOE.
Well, the numbers were more good than bad and the Pound spiked higher to 1.2440s, but as we said, the reverse happened pretty quickly too, so we didn´t catch that move.
I tried a couple of times to open a sell forex trade but was requoted by my broker so I missed the chance. But, we did mention this trade idea, so I hope some of you have taken that opportunity. You must be 30 pips up by now, so I´d suggest that you lock some of the profit in or at least place SL at breakeven.
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