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GBPUSD on the UK CPI morning, a waiting game and what I'm looking for after

UK inflation numbers are due this morning and cable is on my screen. Not trading the release, as always, but wanted to post what I'm watching because these mornings set the tone for the day.

Before the release, I mark the Asian and early London range on M5. After the number, the first move is usually a spike through one side. Then I watch what happens next: does it hold outside the range or fall back in? That's the information I want, not the spike itself.

If it holds outside and retests the edge, I'll take the pullback in the direction of the break. If it falls back in, I'll trade toward the other side of the range with a tight stop above the spike. I give it about twenty minutes before I touch anything because spreads on GBPUSD can be ugly right after a data release.

If the first twenty minutes are all just chop, I'll take the rest of the morning off.

For the range I mark before the release, I use the high and low from the start of Asia up to a few minutes before the number. On CPI mornings London has only just opened, so the early London part is usually small. Sometimes that range is really narrow, and then the spike out of it means less because almost any move breaks it. When that happens I widen my view and use yesterday's high and low as the edges instead. That gives a more meaningful test of whether the move is real.

I also look at how cable reacts compared with EURGBP after the release. If GBPUSD jumps and EURGBP drops by a similar amount, the move is clearly about sterling and I trust it more. If cable moves but EURGBP barely changes, it might be a dollar move that happened at the same time, and then the CPI story is not really what is driving it. It is a quick check and it has kept me out of a few trades where I had the wrong reason in my head.