GBP/USD Outlook: Turns vulnerable to retest multi-week lows, around 1.2765-60 region

The GBP/USD pair extended last week's rejection slide from the key 1.3000 psychological mark and witnessed some aggressive selling during the early European session on Monday. The British pound was being weighed down by reports that the UK could be headed for another, a shorter national lockdown of two weeks to counter a resurgence in COVID-19 cases. The market worries overshadowed the EU Commission President Ursula von der Leyen's supportive comments last Thursday, saying that a trade deal between the EU and the UK was still possible.

Meanwhile, concerns about the second wave of coronavirus infections took its toll on the global risk sentiment. The anti-risk flow was evident from a selloff across the equity markets, which drove some heaven flows towards the US dollar and further contributed to the heavily offered tone surrounding the GBP/USD pair. The USD bulls seemed rather unaffected by concerns that the lack of additional fiscal stimulus measures could hinder the current US economic recovery and the risk-off mood-led sharp fall in the US Treasury bond yields.

There isn't any major market-moving economic data due for release on Monday, either from the UK and the US. Hence, the broader market risk sentiment will play a key role in influencing the intraday momentum. Later during the early North American session, a scheduled speech by the Fed Chair Jerome Powell will further be looked upon to grab some meaningful technical opportunities.

Short-term technical outlook

From a technical perspective, the pair's inability to move back above the 1.3000 mark and the subsequent pullback might have already shifted the near-term bias back in favour of bearish traders. Hence, a subsequent slide back towards the 1.2800 mark, en-route multi-week lows, near the 1.2765-60 zone, now looks a distinct possibility. This is closely followed by 100-day SMA, around the 1.2720-15 region, which if broken decisively will be seen as a fresh trigger for bearish traders and set the stage for a further near-term depreciating move.

On the flip side, the 1.2900 mark now becomes immediate strong resistance, above which the pair could head back towards session tops, around the 1.2965-70 supply zone. Some follow-through buying will negate prospects for any further fall and push the pair further beyond the 1.3000 level. The pair might then surpass the 1.3035-40 intermediate resistance and aim back to reclaim the 1.3100 round-figure mark. The momentum could further get extended and push the pair further towards the next major hurdle near the 1.3175-80 region.