- The GBP/JPY cross edged lower and refreshed 2-1/2 year lows by few pips in reaction to dismal UK Q2 GDP print – showing that the economy contracted for the first time since 2012.
- Despite the downtick, the cross managed to find some support ahead of the 128.00 round figure mark and remained well within a narrow trading band held over the past one week or so.
The mentioned handle should act as a key pivotal point for short-term traders, which if broken should pave the way for an extension of the recent bearish trajectory, though extremely oversold conditions on the daily chart warrant some cautions before positioning for any further depreciating move.
Having said that, a convincing breakthrough the mentioned support might turn the cross vulnerable to accelerate the slide further towards challenging the 127.00 round figure mark en-route its next major support near mid-126.00s – levels not seen since Nov. 2016.
On the flip side, any attempted recovery back above mid-128.00s could get extended but seems more likely to meet with some aggressive support and fizzle out rather quickly near the 129.00 handle – coinciding with a short-term descending trend-line extending from the 130.00 psychological mark or weekly tops set on Tuesday.
GBP/JPY 1-hourly chart
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