The GBPJPY pair, currently priced at 185.003, surpasses the significant level of 185.00, registering a 0.04% increase after the release of inflation data in the UK.

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• GBP/JPY breaks above the 185.00 barrier, gaining 0.04% on the day following the UK inflation data.

The pair currently trades last at 185.003.

The previous day high was 185.33 while the previous day low was 184.35. The daily 38.2% Fib levels comes at 184.95, expected to provide support. Similarly, the daily 61.8% fib level is at 184.72, expected to provide support.

The GBP/JPY cross gains traction and edges higher to the 185.00 area heading into the early European session on Wednesday. The positive UK inflation data is supporting the cross’s momentum. Meanwhile, the possible FX intervention by the Japanese central bank remains in focus.

The latest data by the UK’s National Statistics reported that the nation’s Consumer Price Index (CPI) MoM came in at -0.4%, above the market consensus of -0.5% versus the previous reading of 0.1%. On a yearly basis, British CPI inflation rose 6.8% for June, as expected of 6.8%. The core CPI, which excludes volatile oil and food prices for July, increased 6.9%, better than the 6.8% estimation. Meanwhile, the UK Retail Price Index (RPI) for July came in at -0.6% MoM and 9.0% YoY.

On the other hand, the economic data on Tuesday showed that Japan’s economic growth came in at 1.5% QoQ, versus 0.8% expected and 0.7% previously. On a yearly basis, the GDP increased to 6.0%, compared to 3.1% estimated and 2.7% previously.

That said, the monetary policy differential between the US and Japan is the main driver of the Yen’s weakening. However, the possible additional rate hike by the Bank of England (BoE) might boost the Pound Strerling and act as a tailwind for the GBP/JPY cross.

However, traders turn cautious amid the fear of FX intervention by the BoJ. Finance Minister Shunichi Suzuki stated on Tuesday that rapid movements are “undesirable” and the government is “ready to respond appropriately,” while emphasising that no particular levels are intended for intervention, per Reuters.

Moving on, market players will shift their focus to UK Retail Sales for July. The monthly figure is expected to drop 0.5%. Also, the Japanese Trade data and the annual National Consumer Price Index for July will be released from the Japanese docket later this week.

Technical Levels: Supports and Resistances

GBPJPY currently trading at 185.1 at the time of writing. Pair opened at 184.94 and is trading with a change of 0.09 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 182.13, 50 SMA 181.31, 100 SMA @ 175.15 and 200 SMA @ 168.77.

The previous day high was 185.33 while the previous day low was 184.35. The daily 38.2% Fib levels comes at 184.95, expected to provide support. Similarly, the daily 61.8% fib level is at 184.72, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 184.42, 183.89, 183.43
• Pivot resistance is noted at 185.4, 185.85, 186.38

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