GBP/JPY retreats from 1-1/2 month tops on disappointing UK PMI

Having spiked to a fresh 1-1/2 month high, the GBP/JPY cross stalled its up-move and retreated around 50-pips post disappointing UK manufacturing PMI.

The cross ran through some fresh offers after data released from the UK showed manufacturing sector activity deteriorated sharply in the month of June. The Markit UK manufacturing PMI dropped to 54.3 in June, much lower than May's 56.3 (revised lower) and 56.5 anticipated.

   •  UK manufacturing PMI hits 3-month lows in June, a big miss on expectations

Today's disappointing data seems to have prompted some profit-taking, especially after the pair's latest strong upsurge of 500-pips over the past five trading session and dragged the pair back below mid-146.00s.

Meanwhile, the prevalent risk-on environment was seen weighing on traditional safe-haven assets. Hence, a heavily offered tone surrounding the Japanese Yen has helped the cross to hold above weekly bearish gap opening touched in wake of the Japanese Prime Minister Abe's Liberal Democratic Party's defeat in the Tokyo Metropolitan Assembly election. 

Focus now shifts to the BOE Governor Mark Carney’s speech, due later during the European session, for some fresh impetus. 

Technical levels to watch

Immediate support is pegged at the 146.00 handle, below which the cross is likely to head back towards retesting session lows support near 145.70-65 region before eventually heading back towards the key 145.00 psychological mark. 

On the upside, momentum beyond session high resistance near 146.80-85 region is likely to get extended further beyond the 147.00 handle back towards May monthly tops resistance near the 148.10 level with some intermediate resistance near 147.80-85 region.