GBP/USD extends losses below 1.2500 as risk-off favors US dollar

• GBP/USD registers two-day declines amid broad US dollar strength.
• Coronavirus crisis keeps risk-aversion in play, Brexit talks to resume from next week.
• US data, UK’s review of social distancing measures in focus.

GBP/USD remains heavy around 1.2480, down 0.32% on a day, while heading into the London open on Thursday. Alike other major pairs, the Cable also portrays the broad greenback strength amid the coronavirus (COVID-19) crisis. Moving on, US Jobless Claims and British review of social distancing measures will join the virus updates for fresh direction.

Although the UK’s death toll, due to the pandemic, has recently eased, by 761 versus 778 the previous day, the biggest single-day surge in the US death toll keeps favoring the market’s risk aversion.

Even so, US President Donald Trump and the UK’s Chief medical officer Chris Whitty remain optimistic about the nearness to the peak of the pandemic.

Elsewhere, Brexit negotiators from the European Union (EU) and the UK have agreed to resume talks after a brief break due to the virus. “The next round will begin next week, with further talks scheduled for the weeks of 11 May and 1 June,” said The Guardian.

Amid all these, the market’s risk-tone remains heavy with shares in Asia and the US stocks flashing red signals.

The UK policymakers might cross wires during the day to convey the progress of the latest social distancing measures wherein any hints of how the government will break the lockdown could be awaited.

On the economic calendar, the US Jobless Claims, housing market data and Philadelphia Fed Manufacturing Survey, coupled with the BOE’s first quarter (Q1) Credit Conditions Survey, will be watched closely. Also important will be and a speech by the BOE policymaker Silvana Tenreyro.

Technical analysis

A sustained break of short-term support line keeps the sellers on the lookout of 21-day SMA, currently near 1.2230, during the further downside.