GBP/JPY surrenders a major part of early gains, drifts back closer to 133.00 mark

• GBP/JPY gained some traction on Monday amid a pickup in buying around the pound.
• The prevailing risk-on mood undermined the JPY and remained supportive of the uptick.
• Increasing prospects for an extended lockdown in the UK, Brexit concerns capped gains.

The GBP/JPY cross quickly retreated around 35-40 pips from daily tops, albeit has still managed to retain its positive bias above the 133.00 mark.

Having shown some resilience near the 132.00 level last week, the cross gained some positive traction on the first day of a new trading week and the uptick was supported by a pickup in the buying interest around the British pound.

The GBP maintained its bid tone after the UK Prime Minister Johnson – having survived from coronavirus – said that the first phase of the virus outbreak might be peaking. Johnson, however, highlighted the risk of a second spike in infections.

Meanwhile, the latest optimism over hopes for the reopening of economies worldwide and drug trials for treatments of COVID-19 dented the Japanese yen's relative safe-haven status against its British counterpart and remained supportive.

However, increasing prospects of an extended lockdown in the UK and resurfacing concerns about hard-Brexit kept a lid on any additional gains, instead prompted some selling ahead of 200-hour SMA, around the 133.55-60 region.

The mentioned region coincides with Thursday's swing high and should now act as a key pivotal point for short-term traders. Some follow-through buying should pave the way for a move back towards the 134.40 supply zone.

On the flip side, bears are likely to wait for a sustained break below the 132.00 round-figure mark before positioning for any further near-term depreciating move, possibly towards challenging the 130.00 psychological mark.

Technical levels to watch