GBP/JPY retreats sharply from 2-month highs, back around 147.00 mark

The GBP/JPY cross surrendered majority of its early gains to two-month tops and has now moved on the verge of drifting into negative territory.

The cross has eroded over 70-pips over the past hour or so after BOE Deputy Governor Ben Broadbent, during a scheduled speech at the Scottish Council for Development and Industry, did not comment on the monetary policy or the current economic outlook. This seems to have disappointed investors anticipating some hawkish comments and weighed heavily on the British Pound.

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Meanwhile, an offered tone around the Japanese Yen did little to stall the ongoing slide, with a fresh wave of GBP selling pressure acting as an exclusive driver of the pair's sharp drop back to the 147.00 handle.

From a technical perspective, today’s sharp reversal from higher level could be the first signs of bullish exertion and hence, a follow through corrective slide, especially after the pair’s recent upsurge of nearly 800-pips, now seems a distinct possibility.

Technical levels to watch

On a sustained break below the 147.00 handle, the cross is likely to accelerate the fall towards 146.25-20 horizontal support before eventually breaking below the 146.00 handle and head towards testing its next support near 145.40 area.

Meanwhile, on the upside, 147.75-80 region now becomes an immediate strong hurdle, which if conquered would pave way for continuation of the pair’s strong bullish momentum even beyond yearly tops resistance near 148.10 level and the 149.00 handle towards its next major hurdle near 149.25-30 region.