GBP/USD fails ahead of 1.26 handle, surrender daily gains

The GBP/USD pair once again ran through some fresh offers near the 1.2600 handle and has now reversed all of its daily gains to currently trade with mild weakness near mid-1.2500s.

In absence of any fundamental driver, in-terms of any market moving economic releases, a modest greenback recovery seems to be the only factor contributing to the pair's retracement from session tops. In fact, the key US Dollar Index has now recovered back above the 99.00 handle and seems to have prompted traders to take some profits off the table. 

With the UK PM Theresa May all set to trigger Article 50 on Wednesday and formally begin the process of exiting the European Union, investors seemed reluctant to carry / initiate long positions and could have also hindered further up-move.

Next on tap would be the release of US Consumer Confidence index for March. Later during the day, speeches from various FOMC members, including the Fed Chair Janet Yellen, would be in focus and would be looked upon for fresh impetus during NY session.

   •  US: Consumer confidence and Fed speak in the limelight – Rabobank

Technical levels to watch

On a sustained weakness below 1.2550 level, the pair is likely to slide towards 1.2520 horizontal support before breaking through the key 1.25 psychological mark towards testing its next support near 1.2475-70 area. Meanwhile on the upside, 1.2590-1.2600 area now seems to have emerged as immediate hurdle, which if cleared could extend the up-move towards 1.2635-40 strong resistance.