GBP/JPY struggles near 7-month lows, around 130.00 mark

• GBP/JPY failed to capitalize on its early uptick to 133.00 round-figure mark.
• The global flight to safety underpinned the JPY and prompted some fresh selling.
• The UK government’s approach to fight coronavirus seemed to weigh on the GBP.

The GBP/JPY cross dropped to over seven-month lows on Monday, with bears now eyeing some follow-through weakness below the 130.00 round-figure mark.

The cross failed to capitalize on its attempted intraday recovery move, rather faced rejection near the 133.00 round-figure mark and was being weighed down by a combination of factors.

The equity markets around the world extended their recent freefall amid mounting fears over the coronavirus pandemic and provided a goodish lift to the Japanese yen's safe-haven status.

The JPY was further supported by the fact that the BoJ refrained from cutting rates, instead increased the annual pace of ETF purchases to ¥12 trillion and introduced a new lending program for firms.

On the other hand, the British pound struggled to gain any meaningful traction in the wake of the UK government's different approach to fighting coronavirus by aiming for herd immunity.

The cross has now retreated over 300 pips from daily tops and the price action suggests that the near-term bearish pressure might still be far from being over, supporting prospects for further declines.

Hence, some follow-through weakness, towards testing sub-129.00 level, now looks a distinct possibility amid the global rush to safety and absent relevant market moving economic releases.

Technical levels to watch