GBP/USD Forecast: Bearish bias remains; UK/US macro data eyed for some impetus

• GBP/USD gained some intraday positive traction on Monday amid some aggressive USD selling.
• The UK government’s approach to coronavirus pandemic kept a lid on any strong follow-through.
• Investors now look forward to the UK jobs data/US retail sales figures for some trading impetus.

The GBP/USD pair had some good two-way price swings on Monday and finally settled nearly unchanged for the day, forming a Doji candlestick pattern on the daily chart. The Fed's emergency decision to slash interest rates to zero and introduce a massive bond-buying program to offset any negative impact from the coronavirus pandemic exerted some heavy downward pressure on the US dollar. This eventually provided some initial boost and assisted the pair to gain some positive traction on the first day of a new trading week.

The intraday uptick to levels beyond the 1.2400 round-figure mark lacked any strong follow-through, rather attracted some intraday selling pressure. The UK government's controversial measures of fighting the coronavirus pandemic turned out to be one of the key factors that weighed on the GBP and kept a lid on the early uptick. This coupled with a fresh round selloff across the global equity markets extended some support to the greenback's status as the global reserve currency and further contributed to the pair's intraday pullback.

The pair tumbled to fresh five-month lows but managed to find some support near the 1.2200 round-figure mark. The pair failed to capitalize on the overnight rebound of around 70 pips and met with some fresh supply during the Asian session on Tuesday. Market participants now look forward to the release of UK employment report for some impetus. Later during the early North-American session, the US monthly retail sales data might further contribute towards producing some meaningful trading opportunities.

The key focus, however, will remain on developments surrounding the coronavirus saga, which might continue to play a key role in influencing the broader market risk sentiment and infuse some volatility across the FX market.

Short-term technical outlook

From a technical perspective, nothing seems to have changed much for the pair and the near-term set-up remains tilted in favour of bearish traders. Moreover, the pair's inability to register any meaningful recovery further suggests that the near-term selling pressure might still be far from being over. A convincing break through the 1.2200 mark will add credence to the bearish outlook and set the stage for additional declines towards the 1.2140-30 horizontal support. The downward momentum could further get extended towards testing sub-1.2100 levels before the pair eventually falls towards challenging the 1.20 mark.

On the flip side, any attempted recovery now seems to confront some fresh supply near the 1.2300 round-figure mark, above which the positive move could get extended towards the 1.2350-60 supply zone. A sustained strength above the mentioned barriers might trigger some near-term short-covering move and lift the pair beyond the 1.2400 mark, back towards the overnight swing high near the 1.2420-25 region. Some follow-through buying might assist bullish traders to aim towards reclaiming the key 1.2500 psychological mark.