GBP/JPY Price Analysis: Seems vulnerable near two-week lows, just below mid-151.00s

The GBP/JPY cross extended last week's retracement slide from the 153.30-40 supply zone and witnessed some follow-through selling for the third consecutive session on Monday. The downward trajectory dragged the cross to near two-week lows, around the 151.30 region during the first half of the European session.

With the recent leg down, the GBP/JPY cross seems to have stalled its recent strong rebound from the 148.45 region touched earlier this month. Some follow-through selling below the 151.15 region will be seen as a fresh trigger for bearish traders and set the stage for a further depreciating move amid the risk-off impulse.

Investors remain worried that the fast-spreading Delta variant of the coronavirus could derail the global economic recovery. The concerns were further fueled by disappointing Chinese economic data on Monday, which weighed on investors' sentiment and benefitted traditional safe-haven currencies, like the Japanese yen.

Meanwhile, technical indicators on the daily chart have just started drifting into the negative territory and add credence to the bearish outlook. However, oscillators on hourly charts are already flashing oversold conditions. This, in turn, warrants some caution before placing any aggressive bearish bets.

This makes it prudent to wait for a convincing breakthrough monthly swing lows, around the 151.15 region, to confirm a bearish breakdown. The GBP/JPY cross might then turn vulnerable to accelerate the slide towards the 150.65 region en-route the next major support marked by the key 150.00 psychological mark.

On the flip side, the 152.00 mark now seems to act as immediate resistance. A sustained strength beyond might trigger a short-covering move and lift the GBP/JPY cross back towards the 152.70-80 region. This is followed by the 153.00 mark, which if cleared will shift the bias back in favour of bullish traders.

GBP/JPY daily chart

Technical levels to watch