Premium Watchlist Recap: U.K. Inflation Reports (September 2025)

The U.Ok.’s inflation held regular at 3.8% y/y in September, shocking merchants who anticipated annual costs to rise by a minimum of 4.0%.

How did the British pound react, and which amongst our watchlist setups yielded one of the best buying and selling alternative?

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We’re breaking down our GBP setups this week and the way every pair carried out after the cooler-than-expected U.Ok. CPI launch amid flip-flopping market sentiment.

The Setup

What We Have been Watching: U.Ok. CPI Report for September 2025

The Expectation: U.Ok. CPI was anticipated to print 4.0% y/y progress in September, hotter than August’s 3.8% uptick and double the Financial institution of England’s (BOE) goal.

Information consequence: Headline CPI remained at 3.8% y/y, whereas core CPI eased from 3.6% y/y to three.5% y/y

Market atmosphere surrounding the occasion: The foremost belongings took cues from their particular person catalysts as sentiment shifted round U.S.-China trade-related headlines and geopolitical updates.

Occasion End result

U.Ok. inflation held regular at 3.8% y/y in September, unexpectedly coming in under the 4.0% forecast by economists and the Financial institution of England (BOE).

The most important downward contributions got here from meals and non-alcoholic drinks, the place inflation fell to 4.5% from 5.1% in August, marking the primary slowdown since March. Recreation and tradition costs additionally helped ease strain, whereas transport prices offered upward assist as a consequence of gasoline costs and risky air journey.

The September inflation knowledge marked a constructive shock that would put a November rate of interest reduce in play, although markets stay cautious about aggressive easing expectations.

Key Takeaways:

Headline CPI remained at 3.8% year-on-year in September, under the 4.0% consensus forecast

Core inflation (excluding meals, vitality, alcohol, and tobacco) eased to three.5% from 3.6%

Companies inflation held regular at 4.7%, under the BOE’s expectation of an increase to five.0%

Meals inflation slowed to 4.5% from 5.1%, the primary decline since March
Markets repriced their price minimize expectations to replicate a 75% probability of a BOE price minimize by year-end, up from 46% earlier than the information launch

Basic Bias Triggered: Bearish GBP setups

Broad Market and Exogenous Drivers:

Tariffs Drama Continuation (Monday-Wednesday): The primary half of the week was characterised by shifting US-China dynamics, with Trump downplaying their newest commerce spat with China and expressing optimism about his upcoming assembly with President Xi, citing that the excessive stage of tariffs is “unsustainable.”

Russian Geopolitics Enters the Stage (Midweek): As if commerce headlines weren’t doing a lot of a quantity on general sentiment, flaring geopolitical tensions between the U.S. and Russia took the highlight midweek when the Trump-Putin assembly fell via and sanctions have been introduced on Russia’s oil giants.

Cautious Optimism and Weak U.S. Inflation (Thursday-Friday): Markets resumed their constructive considering forward of the Trump-Xi assembly, holding out expectations that each leaders may resolve commerce issues as soon as and for all, resulting in a danger rally whereas the safe-haven greenback additionally crumbled on dovish Fed expectations from a downbeat CPI print.

In the meantime, the extended authorities shutdown (which Trump claimed would finish inside the week) prolonged the information vacuum, leaving markets to assign elevated weight to restricted info circulate.

GBP: Bearish Occasion End result + Danger-Off State of affairs

= Arguably good odds of a web constructive consequence

GBP/CHF: Sturdy Bearish Occasion End result + Danger-Off leaning Atmosphere

GBP/CHF wasn’t part of our unique set of watchlist record pairs, however Since we didn’t have a greater situation ready, we thought we’d evaluation the almost definitely absolute best setup given the data on Wednesday (i.e., weak U.Ok. CPI + slight destructive shift in broad danger sentiment).

GBP/CHF had been drifting steadily decrease beneath a descending development line however stalling round a short-term vary between the 1.0600 main psychological stage and the pivot level (1.0654) previous to the goal occasion.

The pair was lingering just below the weekly Pivot Level and 100 SMA dynamic inflection level, which then held as a ceiling when worth tumbled sharply again to the ground upon seeing downbeat U.Ok. CPI figures. Though the near-term assist held as merchants probably booked earnings from the report within the periods that adopted, the pivot level resistance as soon as once more saved positive aspects in examine when it was examined later within the week.

From there, GBP/CHF picked up on stronger bearish momentum, presumably with the assistance of the first-ever SNB minutes as they appeared much less dovish, and the bearish shift in danger sentiment as a consequence of rising geopolitical tensions on Wednesday and Thursday.  Sufficient so to take worth under the intraweek lows, which then held as resistance earlier than worth went on to drop to S1 (1.0573)

Not Eligible to maneuver past Watchlist – Bullish GBP Setups

GBP/JPY: Barely Bullish Occasion End result + Danger-On Atmosphere

GBP/JPY 1-Hour Foreign exchange Chart by TradingView

GBP/JPY bounced off the 202.10 Pivot Level and broke above its descending channel resistance even earlier than the U.Ok.’s CPI report, simply because the watchlist had anticipated. However when the inflation numbers got here in weaker than anticipated, the upside setup was invalidated. The pair even slid again to the Pivot Level zone as a substitute of finishing the clear break-and-retest transfer merchants have been eyeing.

Guppy sentiment shifted once more midweek as merchants started speaking about “Abenomics 2.0” on Thursday, fueling recent yen weak point. By Friday, the main target turned to Japan’s inflation dynamics, with markets betting the numbers weren’t sizzling sufficient to justify any near-term BOJ tightening.

GBP/JPY completed the week above the channel, although extra due to the yen’s relative weak point than any actual pound power.

GBP/NZD: Barely Bullish GBP Occasion End result + Danger-Off Atmosphere

GBP/NZD 1-Hour Foreign exchange Chart by TradingView

Final week’s watchlist seemed for GBP/NZD to increase its uptrend from a possible pullback zone if the U.Ok.’s CPI got here in as anticipated. At that time, comdolls have been underneath strain from renewed U.S.-China commerce worries, whereas expectations for warmer U.Ok. inflation have been giving the pound a raise.

However the U.Ok. CPI print missed the mark, invalidating the GBP/NZD bullish setup. The absence of recent tariff threats from both Washington or Beijing additionally helped enhance comdoll demand as general danger sentiment improved.

GBP/NZD had already began slipping earlier than the CPI launch and dropped considerably to round 2.3150 after the information hit. The pair briefly recovered towards 2.3300, presumably on U.S.-Russian geopolitical jitters, however merchants quickly turned their focus again to the upcoming Trump-Xi assembly, sending danger belongings (particularly comdolls) greater. GBP/NZD ended the week close to its lows, effectively under the watchlist’s space of curiosity.

GBP/USD: Very Bullish GBP Occasion End result + Danger-On State of affairs

GBP/USD 1-Hour Foreign exchange Chart by TradingView

Cable’s upside breakout from a short-term double backside sample caught the eye of our analysts, creating a possible retest state of affairs forward of the U.Ok. CPI launch. Nonetheless, the precise outcomes fell wanting market estimates, invalidating the lengthy GBP technique. Easing U.S.-China commerce jitters and a pullback in gold costs additionally helped USD demand later within the week.

GBP/USD slipped under the pivot level stage (1.3381) and 38.2% Fibonacci assist, which held as sturdy resistance after the inflation figures have been printed, permitting the slide to increase under the decrease Fib ranges and onto the subsequent flooring at S1 (1.3290). The pair managed a small rebound on improved danger sentiment, however the bounce didn’t stick. GBP/USD saved its bearish tilt and completed the week close to its lows.

EUR/GBP: Very Bullish GBP Occasion End result + Danger-Off State of affairs

EUR/GBP 1-Hour Foreign exchange Chart by TradingView

EUR/GBP had been forming greater lows and decrease highs inside a symmetrical triangle sample, and it appeared that worth was gearing up for a draw back break simply forward of the goal occasion. However when the CPI knowledge got here in weaker than anticipated, the pair flipped greater as a substitute, invalidating the lengthy GBP technique and bouncing sharply again towards the triangle’s higher boundary.

The resistance space held at first, pushing EUR/GBP again towards the Pivot Level at 0.8687. By Thursday, although, a mid-tier Euro Space report gave the euro a raise, sending the pair previous R1 (0.8710) and turning that space into new assist. From there, bullish momentum constructed as better-than-expected Euro Space PMI knowledge – particularly out of Germany – saved the restoration story alive regardless of weak point in peripheral areas.

EUR/GBP approached the subsequent resistance at R2 (.8748) earlier than the tip of the week, pushed by euro power and pound weak point.

The Verdict

Our watchlist setups have been primarily leaning in the direction of an inline or upbeat U.Ok. CPI print, lacking out on commerce concepts for a potential draw back shock. As a substitute, a GBP/CHF quick bias emerged as arguably essentially the most viable setup for the week, given the goal occasion consequence and extended market uncertainty.

Danger sentiment proved extra complicated than traditional, as the main target was divided between the continued U.S. authorities shutdown, tariffs tantrums between the U.S. and China, trade-related optimism, and geopolitical tensions with Russia.

On this situation that leaned largely risk-off, the franc appeared because the extra secure counter foreign money to pound weak point whereas the standard safe-haven U.S. greenback struggled to seek out clear route whereas the Japanese yen was weighed by stimulus prospects.

General we price our watchlist discussions as “unlikely” since we didn’t discover web bearish GBP situations.

Key Takeaways:

Contemplate Planning for Much less Doubtless Eventualities

Despite the fact that main indicators and analyst projections look like pointing to extra possible outcomes, it by no means hurts to have a backup plan in case the outcomes go the least anticipated means, since this might really create a lot greater revenue alternatives.

On this explicit case, a draw back U.Ok. CPI shock didn’t appear probably, given pricier gasoline, airfare, and the lingering results of April’s Nationwide Insurance coverage hike, however a weaker print strongly stoked dovish BOE expectations and triggered a pointy turnaround for sterling.

Be Fast on Your Ft When Shifting Biases

Staying looking out for explicit technical setups based mostly on a sure occasion bias doesn’t imply you utterly low cost the potential of worth motion going the other means. As an example, even once you’re watching out for a potential triangle breakdown within the occasion of a warmer U.Ok. CPI print, you could possibly nonetheless maintain a possible bullish break in your again pocket in case the outcomes are available considerably under estimates.

Counter foreign money Strikes Can Revive Essentially Invalidated Setups

Simply because a foreign money pair strikes in opposition to your unique bias doesn’t imply the technical setup is completed. When the counter foreign money’s worth driver dominates, it may possibly flip the script and make beforehand invalidated ranges related once more.

Take final week’s strikes for instance. GBP/JPY closed above its watchlist space of curiosity, although largely due to yen weak point, not pound power. In the meantime, EUR/GBP went in the other way of the preliminary bias, however worth nonetheless revered key technical ranges just like the triangle and Pivot Level resistance ranges alongside the best way.

Revisit recognized areas of curiosity as soon as the basic bias has shifted – they could come in useful for a countertrade.