GBP/JPY fails to conquer 146.00 handle, retreats after UK GDP

Having faced rejection at the 146.00 handle, the GBP/JPY cross turned lower and refreshed session lows following the release of UK GDP print. 

The cross weakened a bit after the preliminary UK GDP estimates showed a tepid growth of 0.3% during the second quarter of 2017, in-line with consensus estimates and slightly better than 0.2% growth recorded in the previous quarter. The sluggish UK economic growth cast doubts over recent Bank of England signals that interest rates could rise this year and eventually weighed on the British Pound. 

However, the prevalent risk-on environment did little to boost the Japanese Yen's safe-haven appeal and helped limit further losses, at least for the time being. 

With the UK economic data out of the way, the market now turns their attention to the very important FOMC decision, which would have its impact on investors' risk appetite and drive safe-haven demand, eventually providing some impetus for the GBP/JPY cross.

Technical levels to watch

On a sustained weakness below mid-145.00s, the cross could head back to the key 145.00 psychological mark before dropping to its next support near 144.70-65 horizontal zone. On the upside, the 146.00 handle remains an immediate strong hurdle, which if cleared has the potential to lift the cross towards 146.30-35 intermediate resistance en-route 146.75 level.