Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Risk event for the week starting 20 June: UK inflation

Having seen sterling rise, even though the Bank of England only delivered a 25bps rate increase this week, next week’s CPI data could be key. Justin McQueen, from Daily FX, looks at a trade around GBP/USD.

Risk event for the week ahead: GBP/USD

(Video Transcript)

It's that time of the week now where we take stock and look ahead. And for this, we're looking at a Risk Event for the week starting Monday 20th June. We're joined now by Justin McQueen from DailyFX.

Hi Justin, what have you got?

Morning, Jeremy.

In terms of what we're looking at, we're looking at cable or GBP/USD. Of course, we had the Bank of England (BoE) yesterday that decided to go with a 25 basis point (bps) rate rise.

Markets have been pricing in a little more than that so, subsequently, yet again, another dovish hike from the Bank of England. However, their wording was, I suppose some would say a little bit more hawkish in the fact that they stated that they would act more forcefully due to inflationary pressures.

CPI data

Of course next week we do have the consumer price index (CPI) reading, the core CPI figures as well, out next week on the 22nd of June. And so they'll definitely be something to watch for, and that'll definitely be a Risk Event that we'll be looking out for in terms of cable.

For me, my bias is still for cable to be a sell-on rally. Of course we saw that ramp higher yesterday into $1.24. I don't really think that was justified and subsequently we have pulled back a bit into the mid $1.22s. I still think if you start fading around possibly around $1.2350 or even the $1.23 handle itself, I still think we could see a bit of a return back towards $1.21 and $1.20 as well. $1.20, very good support as we've seen a couple of times, tested but not actually closing below. So that's definitely the level I'd be targeting on the downside.

So again, rally selling for any sort of bids. I still think the outlook looks particularly weak for the UK. Of course the cost of living squeeze continues to weigh on growth. The BoE expecting a contraction in the second quarter now and higher inflation.

So again, it's still a stagflation play for cable and expecting a pullback on any bounces that we see.

Excellent. Justin, thanks very much indeed. Taking a look ahead to that inflation data out here in the UK. That's the Risk Event of the Week starting Monday 20th June.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Start trading forex today

Find opportunity on the world’s most-traded – and most-volatile – financial market.

  • Trade spreads from just 0.6 points on EUR/USD
  • Analyse with clear, fast charts
  • Speculate wherever you are with our intuitive mobile apps

See an FX opportunity?

Try a risk-free trade in your demo account, and see whether you’re onto something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See an FX opportunity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from just 0.6 points on popular pairs
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See an FX opportunity?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.