GBP/USD extends side-trend around 1.2440, US GDP eyed

The GBP/USD pair remains better bid in early Europe, extending its overnight side-trend above daily pivot, as investors remain in a wait-and-see mode after the historic Article 50 got triggered yesterday, paving the way for a formal Britain’s exit from the EU’s membership. Markets believe it will take more than two years for the divorce, once negotiations begin.

Moreover, the pound finds support from easing concerns over a ‘Hard Brexit’, after the UK PM May speech reflected a conciliatory tone toward the EU as she coupled her demand for Brexit with a request for a sweeping free-trade deal encompassing financial services.

However, the possibility of a Hard Brexit landing cannot be ruled out amid speculation that the UK could be penalized by the EU in order to shut the anti-EU voices in other parts of the Eurozone.

Moving on, investors now await fresh impetus from the upcoming US fundamentals, including the final GDP figures due later in the NA session. Meanwhile, the UK docket remains absolutely quiet, as dust settles over the Article 50 trigger aftermath.

GBP/USD Levels to consider            

Karen Jones. Analyst at Commerzbank explains, “GBP/USD near term outlook is more negative: Sterling failed to close above near term resistance at (1.2579/81 February 9th high, and the 78.6% retracement), and seen quite emphatic rejection from here. It has now broken below the 55 and 100 day moving averages and is on the defensive. Intraday Elliott counts are conflicting. Below 1.2347 (Feb low) would cast attention back to the 1.2110 recent low. This is considered to be the last defence for the 1.1988 January low and the bottom of the 5 month range at 1.1903.”