GBP/JPY flirting with daily low at 135.50

The Japanese Yen continues to surge on global risk aversion, with the GBP/JPY cross now trading near session low around mid-135.00s.

Last week, the pair's attempted recovery from 135.00 psychological mark got rejected at 137.00 handle on Friday amid broad based sell-off in US equities, which boosted demand for traditional safe-haven assets - like the Japanese Yen. A fresh bout of intense selling pressure in European equity markets exerted additional selling pressure around the cross on Monday.

The Japanese currency is also benefitting from better-than-expected core machinery orders data from Japan. In absence of any major economic releases on Monday, the prevalent risk-sentiment surrounding equity markets will continue to drive the cross and a follow through selling pressure below 135.00 handle would turn the pair vulnerable to continue with its downslide.

Technical levels to watch

On a decisive break below 135.00 handle, the cross seems to immediately drop to 134.50 intermediate support before heading towards its next major support near 133.50 with 134.00 round figure mark acting as intermediate support.

Meanwhile on the upside, 136.00 area now seems to have emerged as immediate resistance, which if cleared seems to boost the pair further towards 137.00 round figure mark.