GBP/USD retreats toward 1.2550

Cable is about to post the highest daily close since early February. The pair peaked at 1.2614 and then pulled back. Despite gaining more than 70 pips, it ended on a weak note, far from the highs and rejected from above 1.2600. 

A decline of the US dollar, particularity against European currencies boosted the pair on Monday. The rally was strong enough to break above last week highs but it showed some exhaustion above 1.2600. 

GBP/USD holds a bullish tone ahead of the formal start of the Brexit process. The Article 50 is expected to be triggered on Wednesday. Attention is also on the meeting between the First Minister of Scotland, Nicola Sturgeon and UK PM Theresa May. 

Technical outlook 

“The latest downward corrective movement has not been enough to confirm an interim top in the pair, as it would take a break below 1.2535, the 23.6% retracement of the January´s rally to see it falling further”, said Valeria Bednarik, Chief Analyst at FXStreet.

According to her, the 4-hour chart, shows the price above a bullish 20 SMA, whilst technical indicators have retreated within positive territory, with the Momentum nearing 100, but the RSI around 67, this last losing downward strength and pretty much indicating limited selling interest at the time being.