GBP/JPY sits near weekly tops, bulls eyeing a move beyond 140.00 mark

• GBP/JPY gained traction for the second straight day and built on the overnight goodish bounce.
• The British pound remained well supported by Brexit optimism, hotter-than-expected UK CPI.
• Improving risk sentiment undermined the safe-haven JPY and provided an additional boost.

The GBP/JPY cross refreshed weekly tops post-UK CPI, with bulls now eyeing a sustained move beyond the key 140.00 psychological mark.

The cross built on the previous day's goodish intraday bounce of over 100 pips from one-week lows and gained some follow-through traction for the second consecutive session on Wednesday. The momentum was sponsored by the prevalent bullish sentiment surrounding the British pound and receding safe-haven demand for the Japanese yen.

Improving sentiment on Brexit talks continued underpinning the sterling, which got an additional boost from Wednesday's hotter-than-expected UK consumer inflation figures. The headline UK CPI rose 1.0% YoY in July as compared to +0.6% expected and offered the BoE more time to continue with its current wait-and-watch approach.

Apart from this, a modest uptick in the US equity futures dented the Japanese yen's perceived safe-haven status and remained supportive of the GBP/JPY pair's uptick. The global risk sentiment remained well supported by the optimism over a potential vaccine for the highly contagious coronavirus disease and hopes of additional stimulus.

It will now be interesting to see if bulls are able to capitalize on the positive move or the GBP/JPY cross meets with some fresh supply at higher levels. The focus remains on the incoming Brexit-related headlines coming out of the seventh round of talks in Brussels, which will play a key role in influencing the pair's momentum.

Technical levels to watch