GBP/JPY retreats back below 150.00 mark post-dismal UK PMI

The GBP/JPY cross failed to build on early tepid recovery move and retreated over 40-pips, back below the key 150.00 psychological mark on disappointing UK data.

The spot met with some fresh supply after the latest UK construction PMI print showed the construction sector activity extended its downward spiral for the third straight month in September and entered into contraction territory for the first time in thirteen months. 

Against the backdrop of lack of progress in the ongoing Brexit talks, the incoming UK economic data (including yesterday's weaker UK manufacturing PMI print) now seems to suggest that the economy could be losing momentum and attracted some fresh selling pressure around the British Pound. 

Meanwhile, the prevalent risk-on environment, as depicted by strong gains across European equity markets, was seen denting the Japanese Yen's safe-haven appeal and helped limit further losses, at least for the time being. 

Currently hanging within striking distance of over two-week lows touched yesterday's, traders would now take cues from the broader market risk sentiment, which would drive demand for traditional safe-haven currencies, including the Japanese Yen. 

Technical levels to watch

A follow through retracement below 149.60 level is likely to drag the cross towards 149.30-25 intermediate support (yesterday's low) ahead of the 149.00 round figure mark. On the upside, momentum back above the 150.00 handle could get extended beyond session high resistance near 150.25 area but is likely to confront strong hurdle near the 150.40-50 region.