Sterling has recovered all of Monday’s hefty losses and nearly half of the drop seen since last Friday. Regaining 1.2600 – the base of the trading range since mid-December – is a technical positive. There is work still to do, however, and trend dynamics are still leaning GBP-bearish. 

GBP gains through 1.2645/1.2650 in the next day or so should bolster the GBP’s recovery and target additional gains to the upper 1.2600s/low 1.2007s.