GBP/JPY faces rejection near 144.00 handle, retreats to session lows post UK PMI

Despite of upbeat UK construction PMI print, the GBP/JPY cross failed to gain any fresh bullish traction and has now reversed all of its early gains to one-week tops just below the 144.00 handle.

Currently flirting with session lows, around 143.40-35 region, market seems to have shrugged off today's strong reading on UK construction activity. In fact, the final Markit UK construction PMI surged to a 17-month high level of 56 in May, surpassing consensus estimates pointing to a dip to 52.7 from last month's reading of 53.1.

Against the backdrop of Thursday's better-than-expected UK manufacturing PMI, today's stellar data but did little to assist the pair to build on previous session's up-move as investors held back from buying the British Pound ahead of the crucial UK general election on June 8.

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Meanwhile, the prevalent risk-on environment, as depicted by buoyant sentiment surrounding equity markets, did little to boost the Japanese Yen's safe-haven appeal and has helped the cross to hold its neck above the 143.00 handle, at least for the time being.

Technical levels to watch

A follow through retracement now seems to find immediate support near 143.10-143.00 region, below which the cross is likely to accelerate the slide back towards 142.30 horizontal support before eventually breaking below the 142.00 handle towards retesting one-month lows support near mid-141.00s.

On the flip side, momentum back above 143.80 level, now seems to help the cross to move beyond the 144.00 handle towards its next hurdle near 144.25-30 region ahead of 144.60-70 strong resistance.