- Instrument: GBP/USD
- Event-Based Seasonality: UK CPI
- Timeframe: 1-day window on CPI day
- Average Pattern Move: –0.03%
- Winning Percentage: 47.06%
Dear Investor,
You may not realize it, but UK CPI prints have historically triggered mild but consistent downside pressure in GBP/USD, with a notable tendency for sharper drops when inflation surprises to the downside. Based on 119 events over the past decade, the chart below shows that, GBP/USD has posted a –0.03% average return the day after CPI, with a 47% win rate and an annualized return of –12.00%.
While the aggregate move may appear small, some individual prints have triggered outsized losses, particularly when the data undershot market expectations.
Noteworthy drops post-CPI:
- 16 Aug 2022: –0.38%
- 18 Jul 2023: –0.74%
- 14 Feb 2023: –1.18%
- 18 May 2022: –1.22%
- 18 Jul 2016: –1.09%
Each of these cases occurred during moments of heightened uncertainty or policy transition, a familiar backdrop once again in 2025.
Bailey Is Giving Traders a Reason
BoE Governor Andrew Bailey’s latest comments only add fuel to the short-GBP/USD narrative:
“We see signs of softening in the economy and labor market… the direction of rates remains downward.”
“There will be no sustained growth without stable and low inflation… businesses are putting off investment decisions.”
Translation? The BoE is guiding toward a cutting cycle, and traders may simply be waiting for one weak CPI print to pounce.
If inflation misses, the market may accelerate rate cut expectations, push front-end yields lower, and pressure sterling. Given the seasonally soft CPI reaction trend, this could be the excuse traders need.
Technical Outlook
Key monthly support sits at 1.3400 and 1.3000 and offer major targets for any serious sell pressure that may emerge in the GBPUSD
Trade Risks:
- A hotter-than-expected CPI print could delay the BoE easing cycle and trigger short-covering.
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