GBP/JPY goes into consolidation above 147

• GBP/JPY encounters resistance ahead of 148 on Monday.
• The UK data shows that the economy continues to weaken.

Earlier today, a relatively high risk appetite weighed on the safe-haven JPY and allowed the GBP/JPY to pair to rise toward the 148 handle. However, the disappointing macroeconomic data releases from the UK triggered a GBP sell-off and forced the pair to erase a majority of its daily gains. After easing below the 147 mark following the initial reaction, the pair went into a consolidation phase and was last seen trading at 147.20, where it was up 0.18% on the day.

The data from the UK showed that the manufacturing and industrial production both contracted on a monthly basis in April to miss the experts' estimate of modest expansions. On the other hand, the GDP estimate released by the NIESR showed that the expectation of a 3-month economic growth to May fell short of the market consensus of 0.3% with 0.2%. According to the report, the data showed that the economic growth has slowed materially since the start of this year and it continues to remain weak.

In addition to these disappointing figures, uncertainty surrounding Brexit negotiations continue to keep investors away from the GBP. "In back-to-back sessions on Tuesday and Wednesday afternoons this week, the UK House of Commons will undertake a series of debates and votes on amendments made by the House of Lords to the European Union (Withdrawal) Bill," TD Securities analysts noted in a recently published report.

Technical outlook

The immediate resistance for the pair could be seen at 148.10 (Jun. 7 high) ahead of 149.20 (May 9 high) and 150 (psychological level/May 18 high). On the downside, supports are located at 146.70 (Jun. 11 low), 146 (psychological level/Jun. 8 low) and 145.30 (May 25 low).