GBP/JPY recovers from 8-week lows

The pound is rising against the yen on Tuesday after falling yesterday to  the lowest since mid-April. GBP/JPY gained moment after the release of UK inflation data. 

The annual CPI rate stood at 2.9% in May (previous 2.7%) while the core rate came in at 2.6%, surpassing expectations of a 2.4% reading. The data boosted the pound. 

GBP/JPY broke above 139.50 and climbed on top of 140.00. It peaked during the American session at 140.38, still below yesterday’s highs.

UK CPI rises further in May, its highest since April 2012

Technical outlook 

The pair is consolidating above 140.00. The intraday tone favors the pound but on a wider perspective is still under pressure. It is moving in a downward channel, with an upper limit currently at 142.00/10. As long as it remains below, the bias will favor the downside. 

If the pound manages to rise above 140.30, where the 20-SMA in 4-hour charts stands, it has a scope to extend the recovery; initially to 141.00 and above that area resistance might be seen at 141.45/50 and the downtrend line at 142.00/10. 

On the downside, support levels are seen at 139.50 (last week low) and then at 138.60 (Jun 12 low) and 138.00.