GBP/USD remains confined in a range below 1.1600 mark, seems vulnerable

• GBP/USD consolidated the recent steep decline to over three-decade lows.
• Sustained USD buying might continue to keep a lid on any attempted bounce.

The GBP/USD pair lacked any firm intraday direction and seesawed between tepid gains/minor losses through the early European session on Thursday.

The pair now seems to have entered a bearish consolidation phase and digested the previous day’s brutal selloff of nearly 700 pips to the lowest level since 1985, triggered by nervousness over the coronavirus pandemic.

The disappointing over the UK Prime Minister Borish Johnson’s late move to discourage mass gathering and controversial measures on combating the coronavirus outbreak continued exerting some pressure on the British pound.

Even the UK government’s massive £330 billion stimulus package announced on Tuesday did little to provide any respite for the bulls, while heightened demand for the US dollar exerted some additional pressure on the pair.

The fact that investors have been selling almost everything amid worries over the economic fallout from the coronavirus pandemic, the global rush to hoard cash provided a strong boost to the USD’s status as the global reserve currency.

Despite the negative factors, extremely oversold conditions on short/medium-term charts held investors from placing fresh bearish bets and seemed to be the only factor that assisted the pair to hold above the key 1.1500 psychological mark.

Meanwhile, the pair inability to register any meaningful recovery suggests that the near-term selling bias might still be far from being over. Hence, any attempted bounce might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly.

Technical levels to watch