GBP/JPY tumbles to one-month lows near 143.00 handle and rebounds

The GBP/JPY cross finally broke out of its two-day old trading range and tumbled to one-month lows before recovering few pips to currently trade around mid-143.00s.

Today's release of Japanese national CPI, recording gains for the fourth consecutive month, convinced markets that inflation is picking up in Japan and lifted the domestic currency. This coupled with a possible disappointment from the major oil producers meeting on Thursday triggered a fresh wave of global risk-aversion trade and provided an additional boost to the Japanese Yen's safe-haven appeal.

Meanwhile, the prevalent bearish sentiment surrounding the British Pound, against the backdrop of yesterday's disappointing UK GDP growth numbers that compounded concerns over the impending Brexit negotiations, further collaborated to the heavily offered tone surrounding the cross.

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With today's slide to the lowest level since April 27, the cross is headed for its lowest weekly close in the past four weeks and hence, a follow a follow through weakness in the near-term now seems a distinct possibility.

With an empty UK economic docket, broader market risk sentiment would remain an exclusive driver of the pair's movement through the last trading day of the week. 

Technical levels to watch

Weakness below the 143.00 handle is likely to accelerate the slide towards 142.65 region, which is closely followed by support near 142.35-30 area. On the upside, recovery move beyond 143.60 level now seems to confront strong hurdle near 144.00-10 area, above which a bout of short-covering could lift the cross towards 144.55-60 horizontal resistance.