Yo, so UK inflation just popped off from 3.4% to 3.6% in June. 👀 The core CPI wasn’t playing either, going from 3.5% to 3.7% instead of chillin’ as expected. 🔥

So, what’s good with our watchlist setups for this prime-time drama? 😏

Watchlists are like our crystal ball for price vibes & moves, mixing in both street smarts & chart smarts. 🧙‍♂️ It's major when you're cooking up that lit trade idea before finessing a risk & trade plan.

Wanna roll with our “Watchlist” on the ASAP vibes 🔔 throughout the week? Then peep our BabyPips Premium subscribe page to learn more!

The Setup 

• What We Were Clocking: U.K. CPI Report (June 2025)
• The Expectation: Headline CPI y/y holding it down at 3.4%, same as the last one.
• Bloop! Data came out as: UK Inflation bumped up to 3.6% in June, messin' with BOE's rate cut vibe
• Market vibes around the event: Neutral to low-key spooky, 'cause U.S. inflation tea was spilling everywhere and low-key anxiety on Trump maybe firing Powell had folks on edge.

Event Outcome: 

UK’s consumer price inflation was sprinting at 3.6% in June, up from 3.4% in May, hitting the highest note since January 2024. 🚀 This might throw some shade on BOE’s aggressive rate cut dreams soon. 😎

Key Points from the June CPI Report

• Headline CPI went up to 3.6% annually, beating the 3.4% forecast, and monthly inflation flexed 0.3% vs 0.1% in June 2024
• Core CPI (excluding the wild stuff like energy, food n’ drinks) hit 3.7% from 3.5% in May, signaling there’s still some spicy price pressures
• CPIH (including homeowner stuff) rocked it up to 4.1% from 4.0%, smashing the BOE's 2% chill target
• Transport costs, namely motor fuels, brought the big guns to the monthly change, while housing played it cool
• Services inflation chilled at 4.7%, while goods inflation leveled up from 2.0% to 2.4%, peaking since October 2023
• Food and non-alcoholic drinks inflation inched up to 4.5% from 4.4%, keeping the monthly uptrend alive

Fundamental Bias Unlocked: Bullish GBP Vibes

Broad Market and Exogenous Stuff:

This week’s market tea probs had traders gulping down stress balls more than coffee. ☕ It started with Trump’s weekend shocker – threatening 30% tariffs on EU and Mexico by August 1st. Markets freaked, then shrugged as “just his typical moves.” 🙄

Tuesday’s US CPI hit spot on at 2.7%, but surprise! The devil's in the details, fam. 🐍 Furniture prices went cray, likely proving them tariffs are poking consumers. This got bonds spooked more than stocks, with the 10-year yield chilling highs. 📈

Wednesday brought the WTF moment - Trump rumors ready to boot Fed Chair Powell. The dollar flipped, bonds too, until Trump waved it off as “nah.” Classic Washington chaos showing why Fed independence is a big deal. 🙃

Thursday’s data parade was where we finally saw some real moves. US retail rocked (+0.6% vs +0.2% goal) and jobless claims swooped to 221k – way better than 234k. Cue the “US consumers got superpowers” narrative keeping recession worries chill. 💪

Friday topped it with Fed Bro Waller going full dove, pushing for a 25bp July cut. The dollar took a hit, almost -1% before it got its mojo back. 🌊

Scenario Scorecard: How’d They Go Down?

EUR/GBP Total Bull GBP Buzz + Risk-OFF Vibe = High-key best shot at a thumbs up result

EUR/GBP 1-hour Forex Chart by TradingView

In our lineup, EUR/GBP was dragging itself to R1 (.8690) around the major .8700 mind-bender level while flashing bearish side-eye, thinking if the U.K. CPI spills more than expected. Our idea leaned on lower UK vs US-EU tariff craziness.

The pair already bounced away from the resistance spot ahead of the inflation buzz while Uncle Sam’s own inflation stirred up some "oh snap" vibes. Still, it briefly pushed back then stayed on the bearish grind when the U.K. numbers dropped, nosediving to the .8650 just for kicks. 💥

Trump's drama around the potential Powell firing sent forex markets shaking up, pushing EUR/GBP back up to .8700 midweek before the downside caught up again, even post U.K. jobs bummer the following day.

Doubts on an EU-U.S. trade deal getting locked soon put the euro in danger mode, paired with low EU inflation vibes, eventually pressing EUR/GBP to the next low-key spot at .8640. 🙈

Not Vibing Beyond the Watchlist – Bummer GBP Moves and GBP/USD Long Setup

GBP/USD: Bull GBP Event Buzz + Risk-On Scene 

GBP/USD 1-hour Forex Chart by TradingView

While the event backed a bearish scene on GBP/USD, market vibes in the lead-up to the actual U.K. CPI drop didn’t shout “risk-on” party. Investors were edgy, trying to catch Trump’s tariff waves, mixed Chinese receipts, and hotter-than-expected U.S. inflation.

So, there wasn’t enough bullish juice to push Cable up to the comeback spots we eyed near the descending trend line even when U.K. CPI data came in hot. The pair was chilling at fresh weekly lows around the 1.3400 zone before making a lazy move up post-data print.

High volatility, thanks to stress about Trump possibly hitting the eject button on the Fed dude Powell, meant a bigger retrace to the 100 SMA moving zone next sesh, before GBP/USD dipped then bounced off the 1.3400 bounce spot again.

GBP/JPY Short: Net Bear GBP Event Buzz + Risk-Off Mood 

GBP/JPY 1-hour Forex Chart by TradingView

Guppy had been locking itself in a down-triangle chill before the U.K. CPI drop, ready to bounce or break if the outcome falls flat. The pair went bullish early on, thanks to yen struggle city with climbing JGB vibes from election jitters. 😅

Still, clutch U.K. inflation digits didn’t spark big joys in this pair, as safe-haven yen kept its cool while Trump’s Powell fire rumors made headlines. GBP/JPY dropped to the pivot, only to bounce when Trump said firing Powell was “highly unlikely.” 🎯

GBP/AUD Short: Bearer GBP Event Buzz + Risk-On Mood 

GBP/AUD 1-hour Forex Chart by TradingView

This sterling pair already faced mega bear heat from last week, hit by BOE's flip-floppers and a surprise RBA hold move instead of sliding rates.

GBP/AUD was vibing a bearish flag just over the 2.0500 benchmark, so our watchlist was betting on more fields of red if the U.K. CPI missed.

While dips below short-term action hinted at some Chinese resilience during Asia time, a risk-off scare from Powell firing rumors shot the pair above 2.0500 before the U.K. inflation news hit.

Clutch U.K. inflation numbers gave the pair a nudge upward, up and over the 100 SMA moving zone, climbing past 2.0600 with an Aussie jobs miss the next day. GBP/AUD blasted to test 2.0700 as the U.K. jobs report came in strong the day after. 🌟

The Lowdown

Our deep dive analysis + vibes spotlight on a risk-off market + net highs for GBP were all pointing to a EUR/GBP short setup.

The tech side locked in the .8700 ceiling as a point of interest for sneaky shorts pre-event. The pair potentially chilling below this if the market was still vibin’ risk-off post-UK CPI.

Even if market moods caused more than usual drama, EUR/GBP stayed under .8700 like we scoped and kept it moving down when the EU CPI readings shined a different light on UK inflation. 🌐

Overall, we’re rating this as fairly supportive of a win outcome since GBP had some ups pre-inflation news and got back to rising versus EUR after the craziness settled.

Still, trade flexing and finessing play a small game, as market madness might trip you up but also handed another chance to dip at .8700 before EUR/GBP’s bearish vibe came through. 💪

Key Takeaways: When Dope Fundie Data Doesn’t Mean Big Gains

The UK inflation excitement spelled out a key trading reality check: even when economic proof fits your move, market dance can be a letdown or not at all what you banked on. 😅 UK CPI going 3.6% (vs 3.4% goal) and core inflation hitting 3.7% – hype for GBP – but the pound’s fling was surprisingly meh, and more GBP/EUR reaction was in the cards.

Right? 'Cause markets don't groove solo. That week, other narratives ran the scene: Trump's tariff beefs, Fed Chair drama rumors, and bigger picture mood swings overshadowed what should've been GBP's hero moment. GBP/USD, teed up for a bull run, stumbled to make real moves even with the inflation surprises. 🌀

This gap between data hits and price waves happens way more than traders want. You can vibe the fundamental call, chill at key tech spots, and still see the market keep scrolling past your “golden” setup. Outside spice – might be politics, market links, or even low energy – often sway the expected turns.

This is why locking your sizes and getting exit scripts set stays the main over just “being right” on your figures. When strong fundamentals slip past markets, traders sans solid risk playbook often double down in doldrums, betting the market will “wake up.”

The memo is? Play the market you find, not what you think it should give. Your stop loss ain't feelin' your fundie dreams. 🙅‍♂️

The forex wisdom on Babypips.com’s for kicks and good tips. It’s all about the tech and fundie moves to scope out sparking market moments for your own treasure hunts. This is a partial look at the trading story, not direct “do this” trade advice. The scenes on Babypips.com usually won’t fit every wallet and style.

Trade’s all you. Risk management? On you, player. Each trade, every result, you own it. Play smart, fam. Know the turf before you dive in, and if this content's your training ground, hit up our BabyPips Premium subscribe link to school yourself!