UK cost of living as measured by consumer price index (CPI) and core consumer price index is due for release today. Economists expect inflation to have ticked higher in March (0.4% y/y and 0.3% m/m). Core CPI, which excludes volatile food and energy component, is also seen rising 1.3% y/y compared to February figure of 1.2%. GBP/USD had a good day yesterday, rising more than 200 pips to 1.4286 in the NY session. Profit taking pushed it back to 1.4228 levels in early Europe before fresh bid wave pushed it higher to 1.4260 levels. Bulls need better-than-expected CPI data UK gilt yields edged higher as markets priced-in an uptick in CPI. The rise in yields also added to the bid tone around GBP. Thus, GBP bulls would need a bigger rise in CPI in order to chew through offers around 1.4286-1.43 levels. A combination of better-than-expected headline and core CPI would be a big boost to GBP bulls. On the contrary, a weaker-than-expected headline and core CPI print could see gilt yields erase previous day’s gains and thus trigger a sell-off in GBP. A rise in CPI appears to have been priced-in, hence an in line with expectations figure may not leave the doors open for profit taking. GBP/USD Technical Levels The spot currently trades around 1.4260. Acceptance above 1.4252 (50% of 1.4669-1.3835) + 1.4257 (50-DMA) post CPI release would put sell side arguments to rest and open doors for a cut through 1.43 and test of supply around 1.4330 (23.6% of 1.5930-1.3835). On the other hand, failure to remain above 1.4252 would shift risk in favor of a drop to 1.4213 (rising trend line support). A violation there could signal intraday bullish invalidation and possibility of a drop to 1.4170 (hourly chart support). For more information, read our latest forex news.