The Japanese cross GBP/JPY soared above the 135.80 low, recovering earlier losses to add +0.03% during the London session. The bullish wave came in response to the UK inflation figures.

The UK Consumer Prices Index (CPI) 12-month rate came in at 2.0% in May, when compared to 2.1% booked in April while coming in line with expectations of a 2.0% print, the UK Office for National Statistics (ONS) reported on Wednesday.

Meanwhile, the core inflation gauge (excluding volatile food and energy items) arrived at 1.7% y/y versus 1.8% booked in April while matching the consensus forecast of 1.7%.

Technically, the GBP/JPY pair is facing strong resistance at 136.450. Ít’s a double top level which supported the pair back on June 14 and is now working as a resistance. A bullish breakout of 135.500 can lead GBP/JPY towards 137.

Support Resistance
135.77 136.7
135.42 137.28
134.49 138.22
Key Trading Level: 136.35

The pair may face resistance below 50 periods EMA at 136.600. However, GBP/JPY has already violated and crossed over 20 periods EMA. Consider staying bullish above 136.500 and bearish below this level to capture 50 pips on both sides.

Good luck!