GBP/JPY plummets to lowest level since mid-Jan.

The GBP/JPY cross extended previous session's reversal move from the key 140.00 psychological mark and dropped to its lowest level since Jan. 17.

Currently trading around 137.35-40 region, the cross remained heavily offered for the second straight session and reversed over 250-pips from Monday's swing high. Spot has now moved within striking distance of the very important 200-day SMA support amid a fresh wave of risk-off mood, which is seen benefitting the Japanese Yen's safe-haven appeal.

Adding to this, softer tone surrounding the GBP/USD major, against the backdrop of Monday's disappointing UK manufacturing PMI, further collaborated to the offered tone surrounding the cross. 

In absence of any fresh economic development / news, possibilities of some stops being triggered on a decisive break below the 138.00 handle, also seems to be one of the factor contributing the pair's sharp slide in the past hour or so.

Market participants now look forward to the release of UK Construction PMI, later during European session, for some immediate respite for the British Pound. Meanwhile, the broader market risk sentiment would continue to derive Yen's safe-haven demand and would continue to be a key determinant of the pair's move on Tuesday. 

Technical levels to watch

On a sustained break below 200-day SMA support near the 137.00 handle, the cross seems all set to break below yearly lows support near 136.45 level and head towards testing the 135.00 handle with some intermediate support near 135.80-75 area. Meanwhile on the upside, any recovery attempt might now confront immediate resistance near 138.00 round figure mark, above which a bout of short-covering could lift the cross back towards 138.60 intermediate hurdle ahead of 138.85-90 strong horizontal resistance.