GBP/JPY fast approaching 130.00 handle

The GBP/JPY cross failed to build on to its early recovery momentum and turned sharply lower to hit a fresh monthly low.

Currently hovering around 130.20 region, the lowest level since August 18, the cross traded in negative territory for second straight session amid renewed selling pressure around the British Pound. Market expectations of a "hard" Brexit seems to have made a comeback after Friday's comments from UK Foreign Secretary Boris Johnson that UK would officially begin the Brexit negotiations early in 2017 and is weighing on the sterling across the board.

Meanwhile, market seems to have ignored dovish comments from BOJ Governor Kuroda, indicating central bank's readiness to act, amid prevalent risk-off sentiment, which seems to provide an additional boost the safe-haven appeal of the Japanese Yen and exerting further selling pressure around the GBP/JPY cross.

With an empty UK economic docket, the cross would continue to take cues from the broader market sentiment and any further news surrounding the historic Brexit referendum.

Technical levels to watch

From current levels, 130.00 psychological mark seems to act as immediate support, which if broken is likely to accelerate the slide immediately towards August lows support near 129.15 region before the pair eventually drops to test post-Brexit swing low near 128.90 level.

On the flip side, any recovery attempts might now confront immediate resistance near 130.50 level above which the momentum could get extended towards 131.50 horizontal zone with 131.00 round figure mark acting as intermediate resistance.