GBP/JPY is rising more than a hundred pips on Tuesday on the back of a stronger pound across the board. Higher than expected inflation readings in the United Kingdom boosted the currency. The CPI rose 1.0% (y-o-y) in September, reaching the highest since November 2014.
The pair climbed toward 128.0 after the data and following the beginning of the American session broke higher and peaked at 128.16, 1-week high. Currently, it trades at 127.85/90, up 1.05% for the day. So far the pair has been unable to hold above 128.00 but still keeps a bullish tone.
Levels to watch
The pair is facing two immediate strong resistances: the 128.00 handle and last week highs located at 128.60; a break higher could open the doors for an extension of the rally.
On the opposite direction, a decline below 127.10, where the 20-SMA in four-hour charts currently stand could change the short-term bias, favoring a continuation of the consolidation, between 128.00 and 125.00.