GBP/USD clings to strong gains near six-week highs

The GBP/USD pair extended its near-term recovery trend and jumped to six week tops near 1.2600 region. 

Currently trading around 1.2585-90 level, testing session peak, persistent US Dollar weakness, despite of a minor up-tick in the US treasury bond yields, trigger the initial leg of up-move. Adding to this, possibilities of some stops getting triggered, on a decisive move above 100-day SMA barrier, could have further collaborated to the pair's sharp spike during mid-European session. 

Following Tuesday's UK Supreme Court verdict, mandating parliamentary approval for triggering Article 50, receding fears of a 'hard Brexit', coupled with near-term bearish sentiment surrounding the greenback seems to be key factors driving the pair's movement on Wednesday.

In absence of relevant US economic events due on the cards today, investors would remain on Q4 preliminary UK GDP print, due for release during European session on Thursday.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "the 4 hours chart shows that the 20 SMA maintains a sharp bullish slope around 1.2460, whilst the RSI heads modestly higher around 62, but below previous highs, while the Momentum indicator diverges lower, although holding above the 100 line."

"The immediate short term support comes at the mentioned daily low o 1.2490 ahead of the mentioned 1.2460. Below this last, the downward move will likely accelerate towards the 1.2400/20 region. Beyond 1.2550, on the other hand, the pair can spike towards the 1.2600, but selling interest will likely re-surge in this last region."