UK CPI y/y | May 16, 2017 | News Trading Plan

Event Details At-A-Glance:

UK CPI y/y release could provide a good trading opportunity for the Sterling currency as CPI is probably one of the most watched indicator for UK at this time.  With last week’s BOE rate decision vote count at 1-0-7 and the express fact on raising interest rates sooner if “Brexit” were to move smoothly, a rise in inflation could definitely push the market to go LONG on Sterling.

Obviously from a long-term point of view, Sterling is likely to recover as BOE starts to increase interest rate, as the current rate of 0.25% provides no more room for further rate cuts…

4:30am NY Time UK CPI y/y Forecast 2.6% Previous 2.3%
DEVIATION: 0.3% (BUY GBP 2.9% / SELL GBP 2.3%)

The Trade Plan
We are looking for a variable deviation of 0.3%. If the Inflation number remained above 2.9%, we will BUY GBP. If the Inflation number decreases to 2.3% or less, we´ll look to SELL GBP. Historically, even with a slight difference of 0.1%, market usually overreacts. If our deviation is hit, there is a strong possibility that the market will move 50 pips immediately.

We´ll be looking to trade this release using my after-news retracement method. We´ll wait for the release, wait for market spike, and then wait for a decent retracement before jumping in. For more information on my trading methods:

I’d recommend to use the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: GBPUSD.




Outlook Score
Outlook score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency, and a weak Outlook Score is the opposite.

“CPI, Consumer Price Index, is a statistical estimate of the movement of the prices of goods and services bought for consumption purposes by households. Its computation uses price data collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times and estimates of the shares of the different expenditures in the total covered by the index which are usually based upon expenditure data obtained for sampled periods from a sample of households Wikipedia).” It is also known as the “True Cost of Living”.


Currency Pair Stats
2H-50+ = % of 50+ pips move in 2hrs. | 2H-50 = % of 50+ pips move in 2hrs. for the last 2 years | Range = average range in 2 hrs. | Direction = % match following news direction | PN30 / PN60 / PN90 = average pips move before news release in 30, 60, or 90 mins. period | Spike = initial average spike