GBP/USD through 1.2600 handle on notable USD weakness

The greenback remained heavily offered across the board, lifting the GBP/USD pair beyond 1.2600 mark for the first time since early Feb.

Markets seemed to have trimmed their expectations about the US President Donald Trump's aggressive pro-growth economic policies following his failure to push through a healthcare reform bills on Friday. The setback triggered a sharp retracement in the US treasury bond yields and dented sentiment surrounding the greenback. In fact, the key US Dollar Index has plunged to over 4-month lows below the 99 handle, reversing around 80% of  post-Trump gains and lifting the pair to nearly two-month highs. 

Meanwhile, the UK PM Theresa May's efforts to make her case for a strong union with Scotland before she triggers Article 50 also seems to have kept sentiment surrounding the British Pound buoyant and collaborated towards the strong bid tone surrounding the major. 

   •  UK: May will trigger Article 50 - BBH

Next in focus would be a scheduled speech by Chicago Fed President Charles Evans, due later during the NY trading session. 

Technical levels to watch

A follow through buying interest has the potential to continue boosting the pair towards a short-term descending trend-line (extending from Dec. 2016 high through Feb. monthly tops) resistance near 1.2640-50 region. 

On the downside, immediate profit taking retracement now seems to find support near 1.2555-50 area. Any subsequent weakness below mid-1.2500s is more likely to get bought into and hence, is likely to be limited at an important horizontal resistance, now turned support, near the 1.2530-25 area.