- GBP/JPY gains strong positive traction on Wednesday post-UK inflation data.
- Receding safe-haven demand weighed on the JPY and remained supportive.
The GBP/JPY cross jumped to fresh monthly tops, around mid-143.00s in reaction to hotter-than-expected UK consumer inflation figures. The intraday uptick was further supported by an offered tone surrounding the safe-haven Japanese yen, with bulls looking to extend the momentum beyond a two-month-old descending trend-line.
The mentioned hurdle coincides with 38.2% Fibonacci level of the 147.96-140.83 downfall will confirm a near-term bullish breakout. The move will then set the stage for an extension of the pair’s recent positive momentum from sub-141.00 level, strong horizontal support tested earlier this month, which now coincides with 100-day SMA.
Meanwhile, technical indicators on the 4-hourly chart have managed to hold in the bullish territory but are yet to gain any meaningful traction on the daily chart. Moreover, oscillators on the 1-hourly chart have moved on the verge of breaking into overbought territory and warrant some caution before placing any aggressive bullish bets.
Hence, it will be prudent to wait for some strong follow-through buying before positioning for any further near-term appreciating move. The cross then might aim towards reclaiming the 144.00 round-figure mark en-route the 144.35-40 supply zone. The latter also marks 50% Fibo. level and should keep a lid on any further gains.
GBP/JPY daily chart