GBP/USD Forecast: Pound losses locked in as Dr. Lockdown is out, decisions and data awaited

"Doctor lockdown" – Professor Neil Fergusson of Imperial College – was caught violating the shuttering, meeting a lady friend, and was forced to step down from advising the government. His resignation comes at a critical point when Prime Minister Boris Johnson is considering reopening the economy.

Ideas are beginning to emerge and they include a three-staged plan starting from small shops, moving to larger ones, and finally opening bars, restaurants, and hotels. Additional details and a timetable have yet to be published ahead of Thursday's expiry of the current shuttering of the economy. 

While COVID-19 statistics continue trending lower, the UK has reached a grim milestone, topping Europe's number of deaths from the disease. 

Chancellor of the Exchequer Rishi Sunak will also have to decide on the government's furlough plan, balancing between supporting those unable to work but also encouraging people to get back to their jobs. 

Tension is growing towards the Bank of England's rate decision – and its new forecasts – due out early on Thursday. The unusual timing of the decision and the Monetary Policy Report, at 7:00 local time (6:00 GMT), has raised suspicion that the BOE will make a dramatic announcement. 

See Bank of England Preview: Pound plunge with projections or surge with stimulus? Timing raises suspicions

GBP/USD has been dropping amid dollar strength. The world's reserve currency and a safe-haven currency has been benefiting from concerns about the global economy. President Donald Trump repeated his claim that coronavirus originated from a lab in Wuhan, China. Growing friction between the world's largest economies is weighing on sentiment. 

Similar to the UK, the US is also grappling with the next steps in battling coronavirus, with the White House keen on returning to normal. The special COVID-19 task force will likely be disbanded within several days with officials focusing on reviving the economy. 

The ADP employment report for April will likely shed light on the dire situation in the labor market, serving as a hint toward Friday's official Non-Farm Payrolls report. America's largest payroll provider is forecast to report a loss of over 20 million jobs in April.

See ADP Employment Preview: Job losses are known unknowns

All in all, a busy day awaits pound/dollar traders.

GBP/USD Technical Analysis

The Relative Strength Index on the four-hour chart is on the verge of falling below 30 – entering oversold conditions. That could trigger a bounce, yet other indicators such as momentum and the 50, 100, and 200 Simple Moving Averages are pointing to the downside. 

Some support awaits at the daily low of 1.2360, followed by 1.23, which provided support in late April. Last month's low of 1.2250 is the next level to watch.

The first cap is 1.2405, which was a swing low earlier this week. It is followed by 1.2450, where the 50 SMA hits the price, and more importantly by 1.2480, the weekly high. The 1.2520 and 1.2575 levels are next.