Sterling bulls are challenging key technical resistance levels, with GBP/USD trading at 1.2713 as bullish momentum builds near the 21-day moving average. The recent consolidation phase has established strong support at 1.2630, while the declining speculative positioning suggests potential for a short-covering rally. The immediate focus is on the 50% Fibonacci retracement at 1.2761, with the 200-DMA at 1.2820 serving as a major technical objective.

The short-term technical structure shows improving momentum indicators, supported by a rising 10-hour moving average at 1.2688. This setup, combined with weakening dollar momentum and favorable rate differential dynamics, suggests potential for further sterling appreciation. The technical landscape indicates room for movement toward the 1.3000 handle, particularly if bulls can maintain momentum above current resistance levels.

Upcoming U.S. economic data releases could serve as key technical catalysts, with the market likely to maintain a constructive bias above the November 27 low at 1.2569. The current technical configuration suggests an improving risk-reward profile for long positions, though traders should remain mindful of potentially thinning liquidity conditions as year-end approaches.