GBP/JPY retreats from two-month tops post dismal UK macro data

The GBP/JPY cross stalled its upward trajectory and surrendered majority of its early gains to two-month highs following disappointing UK economic data.

Currently trading just below the 147.00 handle, the cross retreated around 65-pips from session tops after the ONS reported that both the manufacturing and industrial production contracted 0.2% and 0.1%, respectively on a monthly basis in May. Adding to this week's slew of disappointing UK data, the UK trade deficit widened to £11.86 billion and seems to have dented sentiment surrounding the British Pound. 

Meanwhile, today's BOJ government bond buying operation to the tune of 500 billion Yen was seen weighing heavily on the Japanese Yen and seems to have limited further downside, at least for the time being. 

It, however, remains to be seen if the cross continues to show resilience amid prevalent risk-off environment, which tends to benefit traditional safe-haven currencies - like the Japanese Yen. 

Technical levels to watch

A follow through retracement below 146.65-60 immediate support is likely to accelerate the slide towards the 146.00 handle, below which the corrective slide could get extended towards the key 145.00 psychological mark.

On the upside, the 147.20-25 region now seems to act as immediate resistance, which if cleared could lift the cross beyond session high resistance near 147.60 level back towards yearly tops resistance near the 148.00-10 region.