GBP/JPY flirting with lows near 140.00 mark

The GBP/JPY cross extended previous session's sharp reversal move from near two-week highs and has now moved on the verge of breaking below the key 140.00 psychological mark.

UK PM May's Deputy Damian Green's statement, that it will still take some time to reach a deal with DUP, attracted some fresh selling pressure around the British Pound. The UK political uncertainty added to the already weaker sentiment surrounding the British Pound, which remained on the back-foot in wake of Tuesday comments by BoE Governor Mark Carney's comments that suggested that a rate-hike is unlikely to come anytime soon.

   •  GBP futures: further decline likely

Meanwhile, a fresh wave of global risk-aversion trade, as depicted by bearish sentiment around global equity markets, was seen boosting the Japanese Yen's safe-haven appeal and further collaborated to the pair's heavily offered tone for the second consecutive session.

With May's Conservative party still struggling to complete the negotiations of its alliance with DUP, investors would now look forward to the Queen's Mansion House speech, marking the formal start of the new parliament. Also in focus would be BoE's Chief Economist Andy Haldane's speech later during European session. 

   •  Queen's Speech to be focused on Brexit

Technical levels to watch

A follow through weakness below 139.70 level is likely to drag the cross back towards 139.15-10 support area en-route two-month lows support near 138.70-65 area, touched last week. On the upside, any recovery move back above 140.35-40 zone now seems to confront resistance near 140.70-75 region (session tops), above which a fresh bout of short-covering could lift the cross back above the 141.00 handle towards its next resistance near 141.55-60 region.