GBP/JPY bounces off multi-month lows, eyeing to reclaim 136.00 handle

The Japanese Yen maintained its safe-haven bid tone, dragging the GBP/JPY cross to its lowest level since mid-Nov. The cross, however, has managed to recover some of its lost ground to multi-month lows and is currently trading marginally below the 136.00 handle amid lighter trading action on Monday.

Increasing geopolitical tensions, after North Korea's latest failed ballistic missile test on Sunday, continued boosting demand for traditional safe-haven assets, including the Japanese Yen. The cross remained well-offered for the fifth consecutive session and extended last week's breakdown momentum further below the very important 200-day SMA and dropped to fresh five-month trough.

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However, a mildly positive sentiment surrounding the GBP/USD major extended some support and seems to collaborate towards limiting further downslide for the cross, at least for the time being.

With UK market closed in observance of Easter Monday, broader market risk sentiment remains a key driver of the pair's movement in absence of any fundamental drivers.

Technical levels to watch

Sustained recovery back above the 136.00 handle could lift the cross back towards 136.35-40 resistance (session peak), above which a bout of short-covering should continue boosting it further towards 200-day SMA important hurdle near the 137.00 handle.

On the downside, 135.60 level now seems to act as immediate support, which if broken is likely to accelerate the slide towards the key 135.00 psychological mark en-route its next support near 134.30 horizontal level.