GBP/USD drops to fresh session low, now eyeing 1.2400 handle

The GBP/USD pair extended its bearish corrective slide from 100-day SMA hurdle and dropped to fresh session low during early NA session.

Currently trading around 1.2425 region, the pair accelerated its downslide after the UK Supreme Court ruled against the government and voted 8-3 in favor of Parliament's approval before triggering Article 50 of the Lisbon Treaty. It is, however, worth reporting that the Parliament has already indicated support for getting on with Brexit process and the UK PM Theresa May has also indicated that the final Brexit plan would be put for a vote in both Houses of Parliament.

Meanwhile, comments from UK Brexit minister David Davis, referring to the need for a Bill to go through Parliament, provided little respite for the bulls and the pair extended its reversal from the highest level since mid-December. 

Meanwhile, a broad based US Dollar recovery, despite of strong dollar warning by Trump’s Treasury Secretary pick Steven Mnuchin, also collaborated to the pair's offered tone on Tuesday.

Next on tap would be US economic docket, featuring the release of flash manufacturing PMI and existing home sales data, which would be looked upon for some fresh short-term trading impetus.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "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."

She further writes, "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."