GBP/JPY tumbles to 134.00 handle amid risk-off sentiment

The GBP/JPY cross maintained its offered tone and dropped to a fresh two-week low level of 134.00 handle amid prevalent risk-off sentiment.

Weakness in European equity markets is seen benefitting the safe-haven appeal of the Japanese Yen. Moreover, traders seemed reluctant to carry any bearish bets against the Japanese Yen amid prevalent uncertain environment as market participants remain divided over the possibilities of further BOJ monetary easing.

Meanwhile, the ongoing selling pressure around the GBP/JPY cross could also be attributed to a fresh bout of weakness seen around the GBP/USD major as traders reposition themselves ahead of the US CPI data.

Focus now shifts to US economic docket, which would have an impact on the safe-haven demand and might eventually provide some immediate momentum play for the GBP/JPY traders. 

Technical levels to watch

A follow through selling pressure below 134.00 handle is likely to drag the pair immediately towards 133.50 horizontal support below which a fresh leg of weakness would open room for continuation of the pair's near-term downward trajectory.

Meanwhile on the upside, any recovery back above 134.50 immediate resistance now seems to confront strong resistance near 135.00 psychological mark, which now seems to cap any near-term upside for the cross.