Forex News Trading Strategy For The Week of 13th – 17th April

UK CPI (Consumer Price Index) – Tuesday the 14th of April 4:30am

CPI which is expected to come out flat at 0% is definitely the most important Forex Trading News event taking place this week. Why is this such a tradable event? First of all, the downside risk to the pound is high because of the UK elections coming in a month. Therefore, I don’t believe that there will be a lot of traders buying into pounds. Simply because the uncertainty in the markets. Basically what I’m expecting is the downside risk to be prevalent and even if the pound rallies I think the market will keep selling the pound. For example, GBP/USD pair might get to 1.44 over the coming weeks or even a bit lower. One of the CPI figures, UK inflation could be a little catalyst for that. If it comes out 0% there will be absolutely no reason for traders to buy the pound. If it comes out worse it will give them more than an excuse to sell a pound. If it will come out better it will not change that huge risk outlook. So even if we get a good UK CPI figure there will still be a huge amount of risk in a pound. Thus, there will still be no a reason to buy it.

So, look out for the CPI figure. You can trade into it if you want, you can sell into it. There is the risk, obviously, that the inflation will come out better and you’ll be caught up in the rally. But even if there is a rally, I’ll, personally, be looking to fade those rallies. I think GBP/USD will remain below 1.50, it could even break 1.45 over the coming weeks.

To sum up, the highlight of the coming week is the UK CPI figure and the pound in general. The risk is definitely to the downside. Look for the opportunities to sell a pound through this week but around that UK CPI figure as well. Hope that helps and hopefully you can use that information and make some pips over the coming week!