GBP/JPY hits near 2-week lows on disappointing UK retail sales

   •  UK monthly retail sales fall short of consensus estimates and weigh on already weaker GBP.
   •  An offered tone around JPY helps ease the bearish pressure and limit any further downside.

The British Pound continued weakening across the board and dragged the GBP/JPY cross farther below the 147.00 handle to near two-week lows. 

The already weaker British Pound was further weighed down by today's disappointing UK monthly retail sales data, coming in to show an unexpected decline of 0.5% m/m in June. Meanwhile, core retail sales, stripping the auto motor fuel sales, dropped 0.6% m/m and might have further dampened prospects for an eventual BoE rate hike move in August. 

However, signs of stability across global financial markets continued weighing on the Japanese Yen's safe-haven demand and helped limit any deeper losses, at least for the time being, with the cross quickly recovering around 30-pips from daily lows. 

With the key UK macro data out of the way, any fresh Brexit headlines/developments might continue to influence sentiment surrounding the GBP and eventually infuse some additional volatility. 

Technical levels to watch

A follow-through selling has the potential to drag the cross further towards 146.50-45 horizontal support en-route the 146.00 round figure mark. On the flip side, any meaningful recovery attempts might now confront fresh supply near the 147.40 level, above which a bout of short-covering could lift the cross back towards reclaiming the 148.00 handle.