GBP/JPY falls to its lowest level since the January flash crash
Price is now making its way below the June low of 135.38 and that will be a key daily support to watch out for in trading today. The pound held weaker in overnight trading after BOE governor, Mark Carney, prompted markets to consider looser monetary policy by the central bank and that sentiment is continuing into the new day.
Add to the fact that the yen is underpinned amid falling bond yields in Europe and the US, that's pushing the narrative for a weaker GBP/JPY and a break below the support level above could spell a slippery slope for the pair.
Fundamentally, there's good reason to stay bearish in GBP/JPY in the coming months amid weakening global economic developments and the fact that we'll see a renewed focus on Brexit once a new UK prime minister is elected.
I reckon more positive US-China trade developments may give the pair some reprieve on the way down in 2H 2019 but in the bigger picture, I still don't see a trade deal in the offing and with the Brexit situation still not looking any better, there's scope for further weakness in GBP/JPY and it'll give reason for rallies to be solid into in the coming weeks.
