GBP/JPY struggling to recover back above 130.00 mark

The GBP/JPY cross ran into fresh offers around 130.40 region, fading all of its UK CPI-led short-covering bounce and has now dropped back below 130.00 psychological mark.

Strong bid tone surrounding traditional safe-haven, Japanese Yen, restricted the pair's recovery from over one-month after higher-than-expected UK inflation report receded possibility of immediate monetary easing by the Bank of England. 

Extending its slide for third straight session, the cross is now struggling to move back above 130.00 handle as the USD/JPY major breaches the very important 100.00 psychological mark support.

Next in focus would be US CPI data, which might influence JPY demand and eventually drive the GBP/JPY cross.

Technical levels to watch

From current levels, recovery above 130.00 mark, and a follow through buying interest above session high resistance near 130.45-50 region, should boost the cross immediately through 131.00 handle towards testing its next major resistance near 131.50 area. 

On the flip side, sustained weakness back below 129.60-50 immediate support would exert further selling pressure and continue dragging the pair in the near-term towards testing sub-128.00 important support.