The risk-off in the markets and resulting flight to safety led to a 500-pip drop in the GBP/JPY pair to a 26-month low of 160.07 levels. What next? As of now, the cross appears on track to hit further lows as the stock markets are showing no signs of respite. Sterling could remain under pressure; given the 10-yr Gilt yield hit record low. Meanwhile, the risk-off is helping Yen gain ground across the board. Ahead in the day, the cross remains at the mercy of the action on the Wall Street. The pair currently trades around 160.54 levels. GBP/JPY Technical Levels The immediate resistance is seen at 163.09 (Aug 2009 high), which if taken out shall open doors for a recovery to 163.98 (previous month’s low). On the other hand, a break below 158.05 (July 2009 close) could see the cross extend the drop to 156.36 (50% of 116.84-195.88). For more information, read our latest forex news.