GBP/USD Forecast: Bracing for new lows as Boris readies coronavirus confinement

• GBP/USD is leaning lower in choppy trading amid the coronavirus crisis. 
• The UK is readying a lockdown as Brits are flouting social distancing guidelines.
• Monday's four-hour chart is pointing to further losses.

"Here comes the sun" – goes the Beatles song, and Brits took advantage of the sunny spring weather to swarm parks – ignoring the government's calls for social distancing amid the coronavirus crisis. Prime Minister Boris Johnson – following the steps of French President Emmanuel Macron – has expressed disappointment and is now preparing for a forced lockdown.

And that is already weighing on the pound, as it would further hurt the British economy. The number of UK infections has topped 5,000, and the death toll is nearing 300 as the disease continues spreading. The government's initial "herd immunity" strategy of letting the virus spread among the healthier members of society while protecting the vulnerable – since reversed – was one of sterling's downers last week. Social distancing is now hurting it. 

The British government is working on new programs to support the economy and especially workers who will be laid off, offering some 80% of workers' salaries, among other steps. The country's funding needs are set to surge, and that is where the Bank of England steps in. Andrew Bailey, Governor of the BOE, pledged an additional £200 billion in fresh QE last week, and more may come.

On the other side of the pond, US lawmakers in the Senate failed to agree on stimulus measures to help struggling businesses, with Democrats demanding to add more strains attached to companies that receive bailouts, while Republicans are laxer. The disagreements in Washington are weighing on global stocks. Earlier in the day, falling US yields weighed on the dollar, but the world's reserve currency seems to be enjoying demand as a safe-haven asset. 

Similar to the UK, the US is moving closer to a full lockdown, with more and more states ordering people to stay at home, adding to job losses. James Bullard, President of the Saint Louis branch of the Federal Reserve, spoke of unemployment rising to 30% and Gross Domestic Product halving at the worst of the crisis. 

One thing is clear – volatility is set to remain elevated. Pound/dollar's daily range of nearly 200 pips is relatively modest in comparison to last week but is significantly beyond the pre-crisis levels. More significant moves are likely later on as further coronavirus headlines are set to rock markets. Updates on the number of cases, new restrictions, and fiscal stimulus are eyed. 

GBP/USD Technical Analysis

Pound/dollar is floating in a low range, failing to stage a meaningful recovery. Momentum on the four-hour chart remains to the downside, and the Relative Strength Index is above 30 – outside oversold conditions. Cable trades below the 50, 100, and 200 Simple Moving Averages.

Support awaits at the daily low of 1.1530, followed by the 35-year low of 1.1414. Next, round numbers such as 1.13 and 1.12 come into play. 

Resistance is at 1.1713, the daily high, followed by 1.18. a round number that was a swing high last week. It is followed by Friday's peak of 1.1920, and by the psychologically significant figure of 1.20. 

More: GBP/USD Forecast: Sell the rally mode as the coronavirus crisis could get worse