The GBP/JPY cross maintained strong bid tone and surged through the key 140.00 mark following the release of UK inflation figures.
Currently trading around 140.25-30 region, testing session peak, spot accelerated the up-move after the latest UK headline inflation print, as measured by CPI, rose more-than-expected, to an yearly pace of 2.3% and surpassed BoE's 2.0% target for the first time since Jan. 2014, a little over three years.
Meanwhile, the core CPI print also rose by 2.0% yearly rate and triggered a broad based rally for the British Pound, helping the GBP/JPY cross to reverse all of its losses recorded in the previous two trading session.
Meanwhile, a modest offered tone around the Japanese Yen, amid prevalent risk-on mood in wake of Macron’s win in the first French Presidential debate, has been supportive of the strong bullish sentiment surrounding the cross.
It, however, remains to be seen if the cross is able to build on to the CPI-led up-move and break through four-week old trading range resistance near the 140.50-60 region.
Next on tap would be comments from the BoE Governor Mark Carney, which would be looked upon for fresh bullish impetus for the British Pound.
Technical levels to watch
Momentum above 140.50-60 region is likely to accelerate the up-move towards next major hurdle near 141.00 round figure mark ahead of 141.40-50 hurdle.
On the downside, retracement back below the key 140.00 psychological mark would reaffirm near-term trading range and drag the cross back towards 139.50 intermediate support ahead of the 139.00 handle and an important horizontal support near 138.40 area.