GBP/USD recovery stalled above 1.2430

After briefly dipping to fresh lows in sub-1.2400 levels, GBP/USD has now regained the 1.2400 handle and above although the up move seems to have run out of legs above 1.2430 for the time being.

GBP/USD weaker on headlines

The Sterling has started the week on a weak footing, coming down to test fresh multi-day lows near 1.2390 vs. the Dollar in response to news citing the probability of a second Scottish referendum on independence.

Developments surrounding Brexit are poised to come to the fore once again this week, as the House of Lords is expected to discuss the bill and vote any amendments today. Market consensus still expects Article 50 to be triggered at some point during March (potentially at the EU Summit in Malta on March 9-10).

It will be a fairly muted calendar in the UK this week, with only the Services PMI for the month of February to be published on Friday. The attention should thus remain on the US docket, with speeches by President Trump (Tuesday) and Chief Yellen (Friday) being the salient points.

On the positioning front, GBP remained under pressure during the week ended on February 21, with speculative net shorts have climbed to the highest level since mid-December.

GBP/USD levels to consider

As of writing the pair is losing 0.30% at 1.2424 and a break below 1.2392 (low Feb.27) would aim for 1.2379 (low Feb.15) and finally 1.2344 (low Feb.7). On the upside, the next resistance lines up at 1.2498 (20-day sma) followed by 1.2571 (high Feb.24) and then 1.2585 (high Feb.9).