The GBP/USD pair fell to 1.2436, its lowest for the day, following the UK Supreme Court decision that the government requires parliamentary assent to start the Brexit process, against government desire to pull the trigger by the end of March without the participation of the Houses. The pair, however, bounced back from the level, although it stands well below the 1.2543 high achieved overnight.
Policymakers in general, have said that they will respect the will of people, but opposition from the Labour MPs and Scottish Nationalist, whilst a new referendum in Scotland could be back on the table, which may result in a delay in the beginning of the Brexit process, generating more uncertainty over the economic future of the kingdom.
Given the bounce from the mentioned low, the downward risk seems limited. Furthermore, the 4 hours chart shows that the price remains well above a bullish 20 SMA, whilst technical indicators are turning modestly higher after correcting overbought readings. Previous daily highs in the 1.2410/20 should now act as support, and below those levels the pair can correct lower, down to 1.2360.
Renewed buying interest above 1.2500 on the other hand, should send the pair up to 1.2550 level, whilst beyond this last an approach to 1.2590 is likely, should upcoming US macroeconomic releases disappoint.
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