GBP/JPY plummets below 148.00 handle, lowest since late Nov.

   •  EU draft Brexit proposal prompts some aggressive GBP selling.
   •  strong JPY aggravates the selling pressure.
   •  Seems vulnerable if breaks below 200-DMA important support. 

The GBP/JPY cross came under some intense selling pressure during the mid-European session and has now slipped below the 148.00 handle to three-month lows.

The pair's retracement slide from mid-149.00s gathered pace following the release of EU's draft Brexit proposal and subsequent comments by the EU's Chief Brexit negotiator Michel Barnier, saying that transition is not a given at the momentum and EU governments will be able to make inputs to the withdrawal treaty draft.

The selling pressure remained unabated after the UK PM Theresa May retaliated by saying that no UK PM could ever agree to EU draft Brexit deal. The comments added to the uncertainty surrounding Brexit talks and weighed heavily on the British Pound.

Against the backdrop of today's news that the Bank of Japan had bought slightly long-dated government bonds, the prevalent cautious sentiment around European equity markets was seen underpinning the Japanese Yen's safe-haven appeal and further collaborated to the pair's sharp fall to its lowest level since Nov. 28. 

Currently placed around the 147.80-75 region, testing the very important 200-day SMA support, a follow-through selling pressure now seems to pave the way for an extension of the pair's near-term bearish slide.

Technical levels to watch

The bearish momentum seems strong enough to continue dragging the cross further towards testing the 147.00 handle, which if broken would confirm a bearish breakdown and continue exerting downward pressure in the near-term.

On the upside, any recovery attempts back above the 148.00 handle might now confront some fresh supply near the 148.60 region, above which a fresh bout of short-covering could lift the cross back above the 149.00 handle towards its next supply zone near mid-149.00s.