GBP/USD Gains 0.5% to 1.2680 Amid Dollar Weakness, Thin Holiday Trade

GBP/USD advanced 0.5% (63 pips) to 1.2680 during Monday's session, capitalizing on broad-based dollar weakness in thin holiday trading conditions. The pound's gains were amplified by reduced liquidity as many traders remain sidelined ahead of the Christmas break. EUR/GBP remained relatively stable near 0.8340, suggesting the move was primarily dollar-driven rather than sterling strength. Technical analysis shows GBP/USD breaking above the 1.2650 resistance level, with next targets at 1.2720 (50-day moving average) and 1.2750 (December high). Support is established at 1.2620, coinciding with the 20-day moving average. The lack of significant economic data releases this week means price action will likely remain choppy and driven by overall dollar sentiment. Traders should be cautious of potential whipsaw movements due to thin liquidity conditions, which can exaggerate price swings in both directions during the holiday period.