GBP/JPY struggles near one-week lows, just above 153.00 mark

The GBP/JPY cross dropped to over one-week lows during the first half of the European session, albeit found some support near the 153.00 mark and recovered few pips thereafter. The cross was last seen trading around the 153.20 region, still down nearly 0.25% for the day.

The cross extended its recent pullback from levels beyond the key 155.00 psychological mark and witnessed some follow-through selling for the fourth consecutive session on Tuesday. The downfall was sponsored by the emergence of some fresh selling surrounding the British pound. Apart from this, the prevalent cautious mood benefitted the safe-haven Japanese yen and exerted some downward pressure on the GBP/JPY cross.

Against the backdrop of last week's dovish Bank of England, worries about the spread of the more contagious Delta variant of the coronavirus acted as a headwind for the British pound. According to the latest official figures reported on Monday, UK added 22,868 new coronavirus cases, the largest one-day increase since January 30. This overshadowed the optimism that the UK remains on track to end the remaining curbs on social contact in July.

Meanwhile, fears that fresh COVID-19 outbreak could undermine the global economic recovery weighed on investors' sentiment and underpinned traditional safe-haven currencies. That said, a goodish pickup in the US dollar demand kept a lid on any strong gains for the JPY. this, in turn, was seen as a key factor that held traders from placing any aggressive bearish bets around the GBP/JPY cross and helped limit any further losses, at least for now.

Technical levels to watch