GBP/JPY retreats from 2-month high, challenging 136.00 handle

Having touched its highest level since Sept. 9, the GBP/JPY cross trimmed some of its strong gains but remained in positive territory for tenth straight session. 

Currently trading around 136.00 region, the cross ran through some offers amid some selling pressure around the British Pound as bulls seems unimpressed by a surprise drop in the UK unemployment rate. According to the data released on Wednesday, UK unemployment rate to three months ending September dropped to 4.8% as compared to previous 4.9%. Market participants, however, ignored better-than-expected print as the same was negated by more-than-expected rise in the number of people claiming unemployment-related benefits (9.8K) during October and no growth in average earnings index (flat at 2.3%). 

Meanwhile, an offered tone around the Japanese Yen has helped the cross to cling on to minor gains. Despite of weaker sentiment around European equity markets, the Japanese Yen has failed to attract any safe-haven flow and assisted the cross to hold its neck above 136.00 handle.

With UK jobs data out of the way, traders now turn their focus to Thursday's release of UK monthly retail sales data, which if disappoints will add to recent disappointment from UK economic data (including Tuesday's CPI print) and attract fresh selling pressure around the British Pound. 

Technical levels to watch

Weakness back below 136.00 handle is likely to trigger a corrective slide towards 134.20-134.00 support area with 135.00 round figure mark acting as intermediate support. On the upside, 136.60 level now becomes immediate barrier, which if cleared is likely to boost the pair towards 137.00 handle en-route its next major hurdle near 137.50 region.

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