• JPY continues to benefit from persistent safe-haven demand.
• GBP bulls look past yesterday’s upbeat UK CPI print.
• Technical selling adds to the downward pressure.
The GBP/JPY cross remained heavily offered and tumbled to 1-1/2 month lows during the mid-European session on Wednesday.
The cross extended its sharp retracement slide from 156.60 area and has now fallen over 800-pips from fresh post-Brexit highs touched earlier this month.
Fragile global risk sentiment, following the recent rout across equity markets, continues to underpin the Japanese Yen's safe-haven appeal and has been one of the key factors behind the pair's sharp fall over the past two-weeks.
Meanwhile, the market seems to have fully digested Tuesday's upbeat UK CPI print, with some renewed GBP selling and the prevalent strong bid tone surrounding the JPY further collaborating to the pair's ongoing slide to its lowest level since Nov. 29.
In absence of any major market moving economic releases, either from Japan or from the UK, today's fall could also be attributed to some follow-through technical selling, especially after Tuesday’s bearish close below the key 150.00 psychological mark.
Technical levels to watch
The bearish momentum seems strong enough to continue dragging the cross towards the 148.00 handle, en-route he very important 200-day SMA support near the 147.55 region.
On the upside, any meaningful recovery attempt is likely to confront fresh supply near the 149.00 handle and any subsequent recovery might now be capped near the 149.80 region.
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