GBP/JPY tumbles below 131.00 handle, hits fresh monthly lows

After attempting a tepid rebound to mid-132.00s, the GBP/JPY cross resumed its near-term downward trajectory and tumbled below 131.00 handle during opening hours of US trading session.

Strong Yen demand following disappointing US economic release exerted intense selling pressure on the cross. Adding to this, a sharp reversal in the GBP/USD major also contributed to the ongoing sharp slide to the lowest level since July 11. 

Lackluster monthly retails sales data and an unexpected slide in PPI spurred a fresh bout of US Dollar selling on fading expectations of an eventual Fed rate-hike in 2016. Meanwhile, the British Pound continues to be weighed down by expectations of aggressive monetary easing by BOE in order to support the UK economy from post-Brexit fallout.

Focus now shifts to the preliminary release of Q2 2016 Japanese GDP print during early Asian session on Monday, which even if comes-in to show in-line with expected quarterly growth of 0.2% might continue to keep the GBP/JPY cross suppressed in the near-term.

Technical levels to watch

From current levels, the ongoing bearish slide is likely get extended towards 130.50 intermediate support, which if broken would accelerate the downfall further towards testing its next major support near 128.50 in the near-term.

Meanwhile on the upside, 131.00 round figure mark now seems to act as immediate resistance, above which the pair could make an attempt to extend its recovery trend back towards 132.00 handle.