GBP/USD bounces back above 1.24

The GBP/USD pair stayed in a 100 pip range on the day of Brexit. After leaping to 1.2475 during the European session, the pair came under renewed selling pressure and dropped to its daily low at 1.2375. As of writing, the pair was down 0.15% at 1.2430.

Article 50 triggered

Although the pair gained some upward momentum after UK's PM Theresa May officially triggered Article 50 by giving the letter to Donald Tusk, President of the European Council, it struggled to extend this move. The heavy sell-off witnessed in the EUR/USD following some ECB headlines suggesting a less likelihood of monetary tightening at the end of the year, allowed the greenback to rally against its other European counterparts as well.

Furthermore, a leaked copy of the European parliament's resolution document showed that there wouldn't be any free trade arrangements with Britain in the next two years. UK's Society of Manufacturers and Traders quickly responded by stating that this was the most significant threat to the competitiveness of the UK automotive sector in a generation. 

Donald Tusk Press Conference UK Notification - Brexit Reaction Statement

The greenback also received an additional boost from the positive data from the United States, which showed that Pending Home Sales Index jumped to its highest level since April at 112.3. During the remainder of the NA session, markets will be keeping a close eye on speeches by Boston Fed E.Rosengren (2019 voter, dovish) and San Francisco Fed J.Williams (2018 voter, centrist).

Technical outlook

The first support for the pair is aligned at 1.2405/10 (50-DMA/100-DMA) followed by 1.2340 (Mar. 21 low/20-DMA) and 1.2300 (psychological level). On the upside, a break above 1.2450 (Fib. 61.8% of Dec/Jan drop) could extend towards 1.25 (psychological level) and 1.2560 (Mar. 27 high).