GBP/JPY flirting with daily lows, just above mid-138.00s

   •  Brexit uncertainties keep the GBP bulls on the defensive and exert some pressure.
   •  Traders lighten positions ahead of Wednesday’s parliament debate on Brexit deal. 

The GBP/JPY cross extended its steady intraday decline and retreated nearly 100-pips from the early European session high level of 139.44.

The cross struggled to the build on the post-flash-crash goodish recovery move from 25-month lows and is now trading with a negative bias to snap two consecutive days of winning streak. 

Earlier today, Irish PM Varadkar's comments, saying that the EU is willing to give written assurances about the nature of the Northern Ireland backstop, did provide a minor lift to the British Pound.

This coupled with the prevalent risk-on mood, amid the latest optimism over a possible US-China trade deal, weighed on the Japanese Yen's safe-haven status and remained supportive of the early positive move.

The uptick, however, was quickly sold into as investors now seemed reluctant to place fresh GBP bullish bets ahead of the UK parliament debate on the PM May's Brexit deal, set to resume this Wednesday.

This coupled with the upcoming meaningful vote on the UK PM Theresa May's Brexit deal, expected to take place on Tuesday, Jan. 15, will influence the GBP price dynamics and eventually provide a fresh directional impetus.

Technical levels to watch

Any subsequent fall is likely to find immediate strong support near the 138.00 handle, below which the cross is likely to accelerate the slide further towards the 137.25-20 region. On the flip side, the 139.40-45 zone now becomes immediate resistance, which if cleared might trigger a short-covering bounce and lift the cross further beyond the key 140.00 psychological mark.