GBP/USD surges above 1.3100 handle

The offered tone surrounding the British Pound eased further during European session, with the GBP/USD pair recovering all of its lost ground and extends its recovery beyond 1.3100 handle to currently trade at session high around 1.3110 level.

In absence of any fresh fundamental trigger, the current up-surge could be attributed to short-covering after an initial gap down opening on reports that UK might invoke Article 50 of the Lisbon Treaty during the first half of 2017 before elections in France and Germany. 

Meanwhile, an upbeat tone surrounding the greenback amid increasing prospects of a Fed rate-hike by the end of this year was also seen weighing on the major during early Asian session on Monday. Markets now look forward to the Fed Chair Janet Yellen's speech at the Jackson Hole Symposium later during this week, which would determine the near-term direction for the US Dollar and eventually provide fresh impetus for the GBP/USD major.

Technical levels to watch

From current levels, 1.3120-30 area seems to act as immediate resistance, above which the pair could head back towards last week swing high resistance near 1.3175-80 region. A convincing strength above 2-week high resistance should pave way for continuation of the pair's recovery trend towards its next major resistance near 1.3220-30 area.

On the flip side, sustained weakness back below 1.3070-60 zone might now drag the pair below session low support near 1.3034 and head towards breaking below 1.3000 psychological mark, en-route 1.2950 support area.