The cross in the GBP/JPY is seen on the back foot so far this Wednesday, as the cable extends its corrective slide into early Europe.
GBP/JPY at the mercy of GBP dynamics
Currently, GBP/JPY drops -0.19% to 127.48, meandering near daily lows struck at 127.41. The GBP/JPY cross retreated from five-day highs, mainly driven by the downward correction seen in the cable after yesterday’s extensive rally further fuelled by solid UK CPI report.
Meanwhile, the USD/JPY pair continues to consolidate below 104 handle amid a broadly weaker US dollar and tumbling treasury yields, which also adds to the bearish pressure behind the prices.
Calendar-wise, we have the UK employment report and US housing data due later on the day, which will have significant impact on the cross.
GBP/JPY Levels to consider
The pair has an immediate resistance at 128.20 (5-day high), above which 128.50 (psychological levels) could be tested. On the flip side, support is seen at 127 (round figure) that at 126.68 (daily S1).