GBP/JPY sees a knee-jerk spike above 142 on BOE’s inaction

The cross in the GBP/JPY popped nearly 200-pips on the BOE’s steady policy outcome and surpassed 142 barrier, before quickly retracing almost the entire spike to revert around pre-BOE levels.

GBP/JPY falls back on 140 handle

The GBP/JPY pair now jumps 2.50% to 140.76, reversing a spike to 142.16, fresh three-week highs, in a blink of an eye post-BOE verdict. The cross remains relentlessly higher, as the sentiment around the pound improved further after the BOE left its benchmark interest rates unchanged at 0.50%, having poured cold water on markets’ expectations of a cut to 0.25%.

More so, the ongoing weakness in the yen on the back of helicopter money speculations, also contributes to the bullish tone around the GBP/JPY cross. Meanwhile, markets will digest the BOE decision and would prefer to remain on the side-lines as dust settles over the BOE aftermath. While a fresh set of US data will remain next in focus for further momentum.

GBP/JPY Technical Levels

To the upside, the next resistance is located at 140.58 (daily R2) and above which it could extend gains to at 142.16 (post-BOE highs).To the downside immediate support might be located 140 (round number) below that at 138.54 (daily R1).