GBP/JPY recovery gains momentum, jumps back above 131.00

After being slammed below 130.00 handle to the lowest level since Nov. 2012, the GBP/JPY cross has managed to stage a recovery back above 130.00 psychological mark to currently trade at 131.30 level.

Concerns over the economic implication of the historic Brexit referendum resurfaced on Tuesday, leading to a renewed selling pressure around the British Pound. Growing uncertainty also led to a fresh bout of buying interest for the traditional safe-haven currency, Yen, and triggered a fresh leg of weakness for the GBP/JPY cross. 

Adding to the bearish sentiment surrounding the British Pound, BOE Governor Mark Carney's comments fueled speculations of additional easing by the central bank is weighing further on the British Pound. 

Although the pair has managed to recover from lower levels, on possibilities of BOJ intervention, persistent worries over the fallout of the UK economy might restrict any swift recovery for the pair. 

Technical levels to watch

Any further recovery momentum above 132.00 round figure mark, leading to strength above session peak level resistance near 132.50, is likely to confront strong resistance near previous swing lows support around 133.00 region. On the flip side, weakness back below 131.00 round figure mark is likely to drag the pair back towards 130.00 psychological mark, below which the cross seems to extend its strong bearish momentum in the near-term.