GBP/JPY keeps the red closer to 6-week lows post UK data

The GBP/JPY cross remained heavily offered through early European session, albeit managed to hold just above previous session's 6-week lows post UK data releases.

The GBP bulls got some respite from a surprisingly stronger than expected UK manufacturing production data that showed m-o-m growth of 0.5% for June, with the total industrial production rising 0.3% during the reported period. 

The positive readings, however, were negated by a larger-than-expected UK goods trade balance data, coming in to show a deficit of £12.75 billion for June as compared to £11.00 billion expected and higher than May's £11.306 billion, and did little to help the cross to register any meaningful recovery from multi-week lows.

With the UK economic data out of the way, the cross remains at the mercy of broader market risk sentiment, which would drive the Japanese Yen's safe-haven demand and provide some impetus for traders.

Technical levels to watch

Immediate support is pegged near the 142.00 handle, which is closely followed by support at the very important 200-day SMA near the 141.80 region. A convincing break below the mentioned support might turn the cross vulnerable to extend the near-term downward trajectory towards the 141.00 handle.

On the upside, any recovery move back above the 143.00 round figure mark might continue to confront some fresh supply near the 143.35-40 region, which if cleared might trigger a short-covering bounce back towards the 144.00 handle.