The GBP/USD pair extended its reversal move from 100-day SMA resistance near mid-1.2500s and retreated around 75-pips from nearly six week high touched earlier.
Currently trading around 1.2480 region, investors seemed to lighten their bullish positions and lock-in some profits ahead of the UK Supreme court's ruling on Brexit, whether Parliament approval is required to trigger Article 50.
Markets seem to be factoring in the Supreme Court ruling against the government. However, with the UK Prime Minister Theresa May confirmation, during her last week's speech, to put the final Brexit plan for a vote in both Houses of Parliament, the initial market reaction is more likely to be short-lived.
Meanwhile, a general greenback buying interest across the board, helping the key US Dollar Index to recover from the lowest levels in more than two months also seems to be collaborating to the pair's corrective slide from the highest level since mid-December.
Later during NA session, flash manufacturing PMI and existing home sales data from the US would be looked upon to grab some short-term trading opportunities.
Technical levels to watch
On a sustained weakness below session lows support near 1.2465-60 area, the pair is likely to accelerate the slide back towards 50-day SMA strong resistance, now turned support, near 1.2410 region. Below 50-day SMA support, the slide could further get extended towards 1.2320-10 support, en-route 1.2250 strong horizontal support.
On the upside, momentum back above 1.2500 psychological mark might continue to confront strong resistance at 100-day SMA near 1.2540-45 region, which if cleared decisively should open room for continuation of the pair’s near-term upward trajectory, even beyond 1.2600 handle, towards 1.2650-55 resistance ahead of 1.2700 round figure mark.
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