GBP/JPY tumbles below 136.00 to 10-day low, though off session lows

A fresh wave of global risk-off sentiment benefitted the Japanese Yen, with the GBP/JPY cross tumbling below 136.00 handle before retracing few pips to currently trade around 136.40-50 region.

The Japanese currency got an initial boost as markets were disappointed on news of government stimulus pack of only 6 trillion yen as against broad expectations in the tune of 20-30 trillion Yen. Moreover, weakness in Japan's Nikkei 225 (ending with a cut of around 1.5%) drove investors to perceived safe-haven currency, Yen. 

Adding to this, news that BOE member Martin Weale favored introducing immediate stimulus measures was seen weighed on the British Pound and sent the GBP/JPY cross tumbling lower to a 10-day low level.

Next in focus would be Wednesday's key release of UK prelim GDP data for Q2 2016 ahead of the much awaited BOJ monetary policy statement and economic outlook on Friday. In the meantime, market will continue to take cues from the prevalent risk sentiment surrounding equity markets and news surrounding the expected Japanese stimulus package. 

Technical levels to watch

On a sustained weakness below 136.00-135.80 immediate horizontal support, the pair seems to continue drifting lower and head towards testing 133.00 support with some intermediate support near 134.75-70 horizontal area. 

Meanwhile on the upside, 137.00 round figure mark now seems to provide immediate resistance, above which the pair is likely to extend the recovery towards a previous strong support, now turned strong resistance near 138.80-139.00 region. 138.00 round figure mark could act as an intermediate resistance on the upside.