GBP/USD - What’s behind the underperformance?

The GBP/USD pair is trading flat to negative around 1.2325 levels despite broad based USD selling in Asia and upbeat UK data releases.

Article 50 jitters

British Prime Minister Theresa May has said she wants to trigger Article 50, the mechanism for leaving the EU, by the end of March. However, the markets are worried that the exit process may not be smooth.

Thus, the British Pound is having a tough time scoring gains against the US dollar. Moreover, the uncertainty surrounding article 50 is overshadowing the strong UK manufacturing PMI and construction PMI figures released earlier this week.

Ahead in the day, the focus would be on the Brexit related news flow; UK services PMI and overall demand for the US dollars.

GBP/USD Technical Levels

A break below 1.23 (zero figure + 5-DMA) would expose 1.2280 (10-DMA) and 1.2262 (Dec 26 low). On the higher side, breach of resistance at 1.2353 (Jan 4 high) would open the door to 1.2388 (Dec 30 high) and 1.24 (zero figure).