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  • GBP/USD edged lower for the second consecutive session on Thursday.
  • The USD remained well supported by concerns over coronavirus crisis.
  • The downside remains cushioned amid a recovery in the risk sentiment.

The GBP/USD pair traded with a mild negative bias just below the key 1.2500 psychological mark, albeit managed to hold above weekly lows set on Wednesday.

The pair failed to capitalize on the previous day’s late bounce from the 1.2440-35 region and remained depressed for the second consecutive session amid the prevailing US dollar buying interest.

Wednesday’s dismal US macro releases showed the severity of the collapse in the economic activity caused by the virus outbreak and continued benefitting the USD’s status as the global reserve currency.

The data further reaffirmed the IMF’s pessimistic view that the coronavirus pandemic could cause the world economy to shrink by 3% in 2020 – the biggest collapse since the Great Depression.

Meanwhile, a goodish recovery in the global risk sentiment, as depicted by a positive mood around the equity markets, curb the USD strength and helped limit deeper losses, at least for the time being.

Hence, it will be prudent to wait for some strong follow-through selling before confirming that the pair might have topped out and positioning for an extension of the overnight slide from five-week tops.

Moving ahead, market participants now look forward to the release of the US weekly jobless claims, which might influence the USD price dynamics and produce some meaningful trading opportunities.

Technical levels to watch