GBP/JPY retreats back below 149.00 mark post-UK CPI

Haresh Menghani FXStreet

• UK inflation unexpectedly holds steady in October.
• Headline CPI rises 0.1% m/m, 3.0% yearly.
• Risk-on mood lending support.

The GBP/JPY cross failed built on overnight recovery move and has retreated back below the 149.00 handle, closer to over 3-week lows post-UK inflation figures.

The British Pound came under some fresh selling pressure after data released from the UK showed headline CPI increased 0.1% m-o-m, with the yearly rate holding steady at 3.0% for October. The readings were slightly below consensus estimates pointing and might have scaled back expectations for any additional BoE rate hike move in the near-future.

Meanwhile, improving investors' appetite for riskier assets, as depicted by bullish trading sentiment around European equity markets, was seen weighing on the Japanese Yen's safe-haven appeal and helped limit deeper losses, at least for the time being.

With the key UK data out of the way, focus shifts to central bankers' conference, where comments by BoE Governor Mark Carney and BoJ Governor Haruhiko Kuroda should provide some fresh impetus.

Technical levels to watch

Immediate support is pegged near mid-148.00s, below which the cross could head back towards retesting the 148.00 handle before eventually dropping to its next support near the 147.75-70 region.

On the upside, momentum above the 149.00 handle now seems to confront fresh supply near the 149.30 region, which if cleared might trigger a fresh bout of volatility and lift the cross back towards the key 115.00 psychological mark.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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