GBP/USD flirts with session lows, below mid-1.2800s

The GBP/USD pair maintained its heavily offered tone through the early North American session and was last seen hovering near daily lows, around the 1.2840 region.

The pair extended the previous session's rejection slide from the vicinity of the key 1.3000 psychological mark and witnessed some heavy selling for the second consecutive session on Monday. Fears over rising COVID-19 cases and talks of a second national lockdown in the UK took its toll on the British pound.

Reports indicated that the UK Prime Minister Boris Johnson is considering another national lockdown for two weeks to counter the outbreak. The UK government's Chief Scientific Adviser Sir Patrick Vallance acknowledged on Monday that the country could see 50K new cases per day in mid-October if no action was taken.

Meanwhile, renewed worries that the ever-increasing coronavirus cases globally could halt the current economic recovery dented investors' appetite for riskier assets. This was evident from a selloff in the equity markets, which drove some heaven flows towards the US dollar and exerted some additional pressure on the GBP/USD pair.

Apart from this, possibilities of some short-term trading stops being triggered below 200-hour SMA, around the 1.2900 mark, further contributed to the GBP/USD pair's slide to four-day lows. Bearish traders might now aim to challenge the 1.2800 mark before dragging the GBP/USD pair back towards multi-week lows support, around the 1.2765-60 region.

There isn't any major market-moving economic data due for release on Monday. Hence, developments surrounding the coronavirus saga will continue to play a key role in driving the broader market risk sentiment. This coupled with a scheduled speech by the Fed Chair Jerome Powell will influence the USD price dynamics and produce some short-term trading opportunities.

Technical levels to watch