GBP/USD surges through 1.2500 handle, refreshes weekly tops

• Some cross-driven strength triggers the initial leg of short-covering bounce. 
• A modest USD pullback from multi-week tops provides an additional boost.
• Possibilities of some intraday stops being triggered accelerate the up-move.

The GBP/USD pair surged through the key 1.2500 psychological mark and refreshed weekly tops in the last hour.

After an early European session dip, the pair witnessed a dramatic turnaround and has now rallied nearly 100-pips from intraday lows around the 1.2425 region. The initial leg of recovery was triggered by some cross-driven strength, stemming out of a sharp intraday slide in the EUR/GBP cross.

The uptick got an additional boost in the wake of a modest US Dollar pullback from five-week tops, which coupled with possibilities of some intraday stops being triggered on a sustained move beyond the overnight swing high - around the 1.2480-85 region, aggravated the short-covering bounce. 

It, however, remains to be seen if the recovery is backed by any genuine buying or is solely fueled by short-covering, which runs the risk of fizzling out rather quickly amid persistent fears of a no-deal Brexit and absent relevant market moving economic releases from the UK.

Technical levels to watch