GBP/JPY quickly reverses a dip to 151.00 neighborhood

The GBP/JPY cross surrendered all of its early strong gains and refreshed session lows, near the 151.00 handle, in the past hour. The cross, however, has managed to quickly rebound around 30-35 pips and is currently trading around the 151.35-40 region.

The cross regained some fresh traction at the start of a new week and touched an intraday high level of 152.27, recovering majority of Friday's losses led by Moody's downgrade of the UK's long-term credit rating to Aa2 from Aa1. 

As the day progressed, the British Pound seemed losing upside momentum as investors seemed non-committal ahead of the fourth round of Brexit talks.

   •  UK optics are poor - BBH

This coupled with a modest pickup in demand for traditional safe-haven currencies, including the Japanese Yen, further collaborated to the pair's retracement of around 120-pips from session tops. 

Meanwhile, the market seems to have digested the latest political development in Japan, where in the PM Abe finally making an announcement to dissolve Parliament on September 28th and confirm the widely expected snap election.

   •  Japan: Snap elections likely on October 22 - BBH

In absence of any major market moving economic releases, broader market risk sentiment and any fresh news/development coming out of the Brexit negotiations would remain key determinants of the pair's movement on Monday.

Technical levels to watch

On a sustained break below the 151.00 mark, the cross is likely to accelerate the slide towards 150.65 intermediate support before eventually dropping to the key 150.00 psychological mark.

Meanwhile, on the upside, any up-move back above 151.60-70 area might continue to confront fresh supply near the 152.00 handle, above which a bout of short-covering could lift the cross towards yearly tops resistance near the 152.75-80 region.