GBP/USD rallies to near 3-week tops, closer to mid-1.2700s

   “¢   The USD bulls remain on the back-foot and help regain traction.
   “¢   Technical buying above 1.2710 further accelerates the up-move.

The GBP/USD pair finally broke out of its Asian session consolidation phase and rallied around 70-pips to near three-week tops.

The latest leg of a sudden spike lacked any obvious fundamental catalyst and could be solely attributed to some renewed US Dollar selling pressure during the early European trading session.

Expectations of a dovish Fed next year, along with a partial US government shutdown kept the USD bulls on the defensive and turned out to be one of the key factors driving the pair higher.  

Adding to this, possibilities of some intraday trading stops being triggered, on a sustained move beyond the 1.2700-1.2710 hurdle, further accelerated the up-move amid relatively thin liquidity conditions.

Hence, it would be prudent to wait for a strong follow-through price action before confirming a near-term bullish breakout, backed by genuine buying rather than a possible stop-run.

Technical levels to watch