GBP/USD keeps the red near mid-1.2300s, still well above daily swing lows

The GBP/USD pair maintained its offered tone through the early European session, albeit has managed to hold comfortably above the daily swing lows and the 1.2300 round-figure mark.

The pair extended the previous day's modest pullback from near two-week tops set last week and witnessed some aggressive selling during the early part of Tuesday's trading action amid some follow-through US dollar buying interest.

As investors digested the Fed's unlimited quantitative easing program, the ever-increasing number of confirmed coronavirus cases across the world benefitted the greenback's perceived safe-haven status against its British counterpart.

Adding to this, a further improvement in the global risk sentiment was evident from a goodish pickup in the US Treasury bond yields, which provided an additional boost to the buck and contributed to the pair's intraday slide.

Meanwhile, Tuesday's mostly in line UK macro data failed to provide any meaningful impetus or impress the GBP bulls, albeit turned out to be one of the key factors that extended some support and helped limit deeper losses.

The pair has managed to recover around 100-pips from daily lows and the emergence of buying at lower levels suggests that the recent strong recovery from the 1.1400 neighbourhood or 35-year lows might still be far from being over.

Moving ahead, market participants now look forward to the US economic docket – featuring the release of Chicago PMI and Conference Board's Consumer Confidence index – in order to grab some short-term trading opportunities.

Technical levels to watch