GBP/JPY extends dismal UK GDP-led retracement from one-week highs

Having refreshed one-week highs near mid-145.00s, the GBP/JPY cross retreated around 70-pips following dismal UK Q1 GDP print. The selling pressure remains unabated, with spot extending the slide to 144.70 level. 

Spot ran through fresh offers after the UK GDP estimate was revised lower to show that the economy is now expected to have expanded at a tepid rate of 0.2% q-o-q, with the yearly rate also ticking lower to 2.0%. The readings were weaker than original estimates showing a quarterly growth of 0.3% (2.1% y-o-y) and attracted some fresh selling pressure around the British Pound. 

Morever, sentiment surrounding the British Pound remains weak following a fresh reports of an incident occurred at Trafford College, Manchester, which added to concerns over a tragic terrorist attact earlier this week and the latest jitters from EU-UK standoff over the €100 billion Brexit divorce bill.

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Meanwhile, the prevalent risk-off environment, as depicted by a mildly weaker sentiment surrounding European equity markets and further reinforced by sliding bond yields, did little to boost demand for traditional safe-haven assets. Hence, an offered tone around the Japanese Yen seems to have limited further losses and helped the pair to hold above session lows near mid-144.00s, at least for the time being.

With the key UK economic data out of the way, broader market risk sentiment would now turn out to be an exclusive driver of the pair's movement through the rest of the trading session on Thursday. 

Technical levels to watch

On a sustained weakness below session lows support near mid-144.00s, the cross is likely to accelerate the slide back towards 143.60 horizontal area with some intermediate support intermediate support near the 144.00 handle. On the upside, momentum back above the 145.00 handle might continue to face some fresh supply near 145.40-45 region, above which a fresh bout of short-covering could lift the cross back towards the 146.00 round figure mark en-route its next major hurdle near 146.60-65 region.