The U.K. is set to release its December inflation data, and the general expectation is that consumer prices will land roughly in line with forecasts, backing the Bank of England’s (BOE) recent “hawkish cut” stance.
That said, our Event Guide for the U.K. CPI flags a risk scenario. If inflation comes in meaningfully cooler than markets expect, Sterling could face renewed selling pressure, especially with geopolitical tensions and trade war worries already lurking in the background.
If that plays out, traders may start paying closer attention to potential setups on GBP/USD and EUR/GBP’s charts.
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