GBP/JPY Price Analysis: Marches towards 182.00 resistance on upbeat UK inflation GBP/JP
- GBP/JPY prints the first daily gains in three after UK inflation data, snaps two-day losing streak.
- UK CPI, Core CPI both rose past market forecasts in May.
- Clear bounce off 100-HMA, upbeat oscillators also favor the pair buyers.
- Weekly resistance line prods immediate upside as bulls brace for fresh multi-month high.
GBP/JPY justifies upbeat UK inflation data to regain upside momentum, snapping two-day downtrend, amid early Wednesday morning in London. That said, the cross-currency pair jumps 80 pips to refresh its intraday high near 181.60 before recently making rounds to the mid-181.00s.
UK Consumer Price Index (CPI) for May rose past 8.4% market expectations to reprint the 8.7% YoY figure. That said, the Core CPI, which excludes volatile food and energy items, rose past analysts’ estimations and previous readings of 6.8% YoY to register a 7.1% YoY increase in inflation numbers for the said month.
Apart from the UK inflation data, the GBP/JPY pair’s clear rebound from the 100-Hour Moving Average (HMA), around 180.60 by the press time, joins the bullish MACD signal to also keep the pair buyers hopeful.
It’s worth noting, however, that the RSI (14) line approaches the overbought territory and hence a downward-sloping trend line from Monday, close to the 182.00 round figure, appears a tough nut to crack for the bulls.
In addition to the 182.00 hurdle, the latest multi-month high of near 182.15 also acts as an upside filter for the GBP/JPY pair before directing it towards the December 2015 peak of around 186.35.
Alternatively, a downside break of the 100-HMA level of near 180.60 will need validation from the 180.00 round figure and the latest swing low of 179.90 to convince intraday sellers.
Even so, the 200-HMA and a two-week-old rising support line, respectively near 178.15 and 177.65, will challenge the GBP/JPY bears before giving them control.
GBP/JPY: Hourly chart
Trend: Further upside expected