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GBP/USD dependent on article 50
A potential activation of article 50 this week offers the chance of volatility in sterling, at least in the short-term. We have seen the pullback in GBP/USD begin to slow, with a possible base of support being formed around $1.2150.
A rally into the 200-hour simple moving average (SMA) of$1.2231 has pushed the pair to its highest level in around a week. A breakout from here could see $1.2366, and then the 50-day SMA at $1.2384 tested. A break of $1.2150 would be needed to reassert bearish momentum, potentially opening the way for a move below the $1.20 level again.