- GBP/JPY continues the yesterday bounce to trade near weekly-tops.
- A better than expected UK CPI helps the cross.
- Brexit talks optimism assisting the pound.
- JPY demand is affected as risk sentiments improve.
GBP/JPY bulls are now eyeing the 140.00 psychological level as the cross refreshed its weekly high after the UK CPI release. The pair built-on the previous day’s intraday bounce of over 100 pips from the day’s low, also the one-week low, and gained for the second continuous session today.
The upside momentum in the GBP/JPY is set by the bullishness in the pound and a reduced appeal for Japanese Yen in a pro-risk broad-market environment.
The UK core price inflation went up by one Percent YoY, much more than market expectations of 0.6 Percent. Such a rise in inflation will help the Bank of England to protect its currency without having to take immediate action to revive the demand side of the economy.
The rise in US equity futures also helped the pair as the optimism took investors way from the haven-linked Yen. The risk perception has turned lower recently as the hopes for a coronavirus vaccine are seeing signs of fruition, and stimulus hopes from the US stay high.
Now, it will be interesting to watch the tussle between GBP/JPY bulls and bears with both focusing on the ongoing Brexit talks.
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