GBP/USD consolidates near 1.4230 after 100-pips inflation-miss-related fall

• The GBP/USD is consolidating near 1.4230 after losing more than 100 pips as the UK inflation data missed the expectations.
• Headline UK inflation rose 2.5% over the year in March while core inflation rose 2.3% over the year.
• Inflation miss is putting the Bank of England expected rate hike in May into question. 

The GBP/USD is trading at around 1.4230 down 0.4% on Wednesday as the North American forex session is kicking off.

The GBP/USD made a high at 1.4315 in the early European session after which the bears took the lead on the back of disappointing inflation data in the UK for the month of March. Headline Consumer Price Index (CPI) rose 2.5% over the year in March compared to 2.7% y/y in February. At the same time core inflation increased 2.3% over the year in March. On a monthly basis, prices were up 0.1%, which is below the 0.3% gain forecast.  The GBP/USD lost more than a 100 pips as the batch of news was released. 

The cable found an intraday low at 1.4173 and is now consolidating above the 1.4220 level. 

Coming up next in the US macroeconomic calendar is the Fed’s Beige Book report at 18:00 GMT. 

Two more Fed’s speeches are scheduled on Wednesday with the next one coming at 19:15 GMT. William Dudley, the New York Federal Reserve Bank President, is set to talk about the economic outlook and monetary policy at the City University of New York's Lehman College.

GBP/USD 4-hour chart

The cable is consolidating above its 50-period simple moving average. Immediate support is seen at 1.4173 intraday low and then at the 1.4100 figure. Resistance, on the other hand, is priced in at the 1.4300 handle and at 1.4377 high of the year.