GBP/USD rallies over 40-pips from 2-week lows, refreshes session tops

   •  Stages a goodish rebound to snap four consecutive days of losing streak.
   •  Brexit jitters/follow-through USD buying might keep a lid on further gains.

The GBP/USD pair quickly reversed an early European session dip to two-week lows and rallied around 40-45 pips to refresh session tops in the last hour.

Despite a series of weak PMI prints recently, which reaffirmed the effects of Brexit uncertainties on businesses, the pair showed some resilience at lower levels and managed to regain positive traction to snap four consecutive days of losing streak. 

The uptick lifted the pair back above mid-1.2900s, beyond Asian session swing high, touched in reaction to a report by the Telegraph that several cabinet ministers have secretly discussed plans to delay Brexit by eight weeks - from the current March 29 deadline to May 24. 

Having said that, a possible extension of Article 50 still looks unlikely at this juncture, which coupled with growing market expectations for a no-deal Brexit might continue taking its toll on the Sterling and keep a lid on any runaway rally for the major.

Hence, it would be prudent to wait for a strong follow-through up-move beyond the key 1.3000 psychological mark before calling this a real turnaround and concluding that the uptick is backed by some genuine buying rather than short-covering from oversold conditions.

Technical levels to watch