GBP/JPY extends intraday pullback from 146.00 mark, refreshes session lows

   •  Brexit uncertainties keep the GBP bulls on the defensive and prompt some selling at higher levels.
   •  JPY benefits from reviving safe-haven demand and further collaborates to the intraday downfall. 
   •  Focus remains on May’s meeting with Merkel/Macron ahead of Wednesday’s EU Brexit summit.

The GBP/JPY cross faded an early European session bullish spike to levels just above the 146.00 handle and refreshed session lows in the last hour. 

The cross did get a minor intraday lift in wake of news that German Chancellor Angela Merkel was willing to put a five-year time limit on Irish backstop, albeit quickly ran out of steam after Germany denied the report. 

The intraday downtick accelerated further amid a modest GBP selling after the UK opposition Labour Party's John McDonnell said that there haven’t been sufficient talks on alignment with the single market.

This coupled with the prevalent cautions mood further underpinned the Japanese Yen's safe-haven demand and collaborated to the pair's sharp intraday slide of around 80-pips from an intraday high level of 146.05.

The downside, however, remained cushioned as investors seemed reluctant to place aggressive bets ahead of the UK PM Theresa May's meeting with German Chancellor Angela Merkel and French President Emmanuel Macron. 

This coupled with the upcoming EU's Brexit summit on Wednesday will influence the sentiment surrounding the British Pound and eventually provide some meaningful impetus for the pair's next leg of a directional move.

Technical levels to watch

Immediate support is pegged near the key 145.00 psychological mark, below which the cross is likely to accelerate the fall towards 144.60 intermediate support before eventually aiming to challenge the 144.00 handle. On the flip side, the 146.00 mark now seems to act as an immediate resistance, which if cleared might trigger a short-covering bounce and lift the cross further towards the 146.55-60 supply zone.