GBP/USD refreshes session low and rebounds, back above mid-1.2000s

The GBP/USD pair dropped around 80 pips in the last hour and moved well within the striking distance of YTD lows set on Tuesday.

The pair failed to capitalize on its early uptick to the 1.2130 region, rather met with some fresh supply and was being weighed down by a sudden pickup in the US dollar demand.

A strong follow-through pickup in the US Treasury bond yields assisted the greenback to build on the previous session's strong gains and exerted some fresh pressure on the major.

The greenback was further supported by its status as the global reserve currency amid fears over the economic fallout from the coronavirus outbreak and a rush to hoard cash to ride through the crisis.

On the other hand, the British pound found some support in the wake of the UK government's £330 billion stimulus package announced on Tuesday, which might help limit deeper losses.

Hence, it will be prudent to wait for some strong follow-through selling, possibly below the overnight swing low near the key 1.20 psychological mark, before positioning for any further weakness.

In absence of any major market-moving economic releases, either from the UK or the US, the pair remains at the mercy of the USD price dynamics and developments surrounding the coronavirus saga.

Technical levels to watch