GBP/JPY fails to conquer 147.00 handle despite of upbeat UK inflation figures

The GBP/JPY cross built on to previous session's up-move and surged through the 147.00 handle following the release of latest inflation figures from the UK.

Spot caught fresh bids after the UK headline inflation, as measured by CPI, jumped 0.5% m-o-m during April, taking the yearly rate to 2.7% for the recorded period. The readings were above consensus estimates and lifted the British Pound across the board.

   •  UK CPI rises beyond expectations in April, highest since June 2013

However, given that the Bank of England has already raised its projection for inflation in Q1 to 2.7%, reaction to a higher-than-expected reading turned out to be short-lived and the cross struggled to build on early move. 

Other inflation readings, namely – PPI, RPI and HPI were mostly above market expectations but did little to provide any additional boost to the British Pound.

Technical levels to watch

On a sustained move above the 147.00 handle, the cross is likely to head towards 147.35 horizontal resistance before the momentum gets extended back towards yearly highs resistance near 147.90-148.00 region. On the flip side, retracement back below mid-146.00s could drag the cross back towards 145.90-80 support area.