GBP/USD struggles to capitalize on attempted recovery, holds above 1.2300 mark

• GBP/USD gains some respite on Monday amid some heavy USD selling.
• The Fed’s emergency rate cut seemed to weigh heavily on the greenback.
• The UK government’s approach to coronavirus outbreak capping gains.

The GBP/USD pair struggled to capitalize on its attempted recovery move and remained well below the Asian session swing high level of 1.2422.

The pair gained some respite on the first trading day of the week and snapped four consecutive days of losing streak to five-month lows amid some heavy bearish pressure surrounding the US dollar.

The Fed's emergency decision to slash interest rates to zero and introduce a fresh round of quantitative easing triggered a fresh leg down in the US Treasury bond yields, which weighed on the greenback.

However, the fact that investors were largely disappointed by the UK government's approach to containing the coronavirus outbreak held the GBP bulls from placing any aggressive bets and capped any additional gains.

Currently oscillating in a narrow trading band around mid-1.2300s, the pair's inability to register any meaningful recovery suggests that the recent bearish trajectory might still be far from being over.

It is worth recalling that the pair las week faced rejection near the 1.3200 mark and tumbled around 950 pips from weekly tops amid a strong revival in the USD's demand as the global reserve currency.

Hence, it will be prudent to wait for some strong follow-through buying before confirming that the pair might have already bottomed out in the near-term and positioning for any further recovery move.

Technical levels to watch