GBP/JPY retakes 140.00 mark post UK CPI

The GBP/JPY cross held on to its strong recovery gains and moved back to the key 140.00 psychological mark following the release of latest UK inflation figures.

Spot continued gaining traction after the headline UK inflation, as measured by CPI, came-in to show m-o-m price rise of 0.3% during May, lifting the yearly rate to 2.9%. The readings were slightly above consensus estimates and seem to have prompted some additional short-covering. 

The cross has now reversed majority of previous session's losses to near two-month lows touched in the aftermath of Friday's disastrous UK snap election results. 

Investors now shift their focus to this week's important event risks - BOJ and BOE monetary policy decisions on Thursday.

Technical levels to watch

A follow through buying interest above 140.15-20 area might continue to boost the cross further towards 140.45-50 resistance area, above which a fresh bout of short-covering should lift it back above the 141.00 handle.

On the flip side, 139.55-50 area now becomes immediate support to defend, which if broken could accelerate the slide back towards 139.15 support before the cross eventually breaks below the 139.00 handle and head towards testing its next major support near 138.25-20 region.