GBP/USD Analysis: Range play continues; resilient despite coronavirus jitters

• GBP/USD defied broad-based USD strength and remained confined in a range.
• The British pound seemed unaffected by a big jump in the UK coronavirus deaths.
• A modest recovery in the risk sentiment helped gain some traction on Thursday.

The GBP/USD pair settled with modest losses on Tuesday amid broad-based US dollar strength, albeit remained well within this week's trading range. Despite efforts by major central banks and governments across the world, concerns over the economic fallout from the coronavirus pandemic continued underpinning the USD's demand as the global reserve currency.

On the other hand, the British pound once again showed some resilience at lower levels and also seemed rather unaffected by a big jump in the coronavirus deaths in the UK. This comes after Fitch last week lowered its UK long-term issuer default ratings to AA- from AA, albeit did little to impress bearish traders or prompt any aggressive selling around the major.

Meanwhile, the already weaker market sentiment deteriorated further after the White House medical experts warned that as many as 240,000 Americans might die from the respiratory disease. However, a modest recovery in the US equity futures assisted the pair to regain some positive traction during the Asian session on Thursday and move back above the 1.2400 round-figure mark.

In the absence of any major market-moving economic releases from the UK, Thursday's key focus will be on the US initial weekly jobless claims data. Consensus estimates predict that another 3.5 million Americans filed for unemployment benefits during the week ended March 27. The data should influence the USD price dynamics and produce some meaningful trading opportunities.

Short-term technical outlook

From a technical perspective, the recent subdued/range-bound price action now seemed to constitute towards the formation of a rectangle on hourly charts. The lower end of the trading range, around the 1.2315-10 region, coincides with 100-hour EMA and should now act as a key pivotal point for intraday traders.

A convincing break through the mentioned confluence support might prompt some aggressive selling and accelerate the slide back towards the weekly lows support, around the 1.2245-40 region. Some follow-through selling has the potential to drag the pair further towards challenging the 1.2200 round-figure mark.

On the flip side, immediate resistance is pegged near mid-1.2400s and is followed by the recent swing highs, around the 1.2475-80 region. A sustained strength above the mentioned hurdles, leading to a subsequent move beyond the key 1.2500 psychological mark might set the stage for the resumption of the pair’s recent strong positive momentum.

The pair then might aim towards reclaiming the 1.2600 round-figure mark en-route the 1.2625 resistance zone. The momentum could further get extended towards the very important 200-day SMA, currently near the 1.2675-80 region.