GBP/USD Bottom To 1.24?

Sterling enjoyed its strongest one-day rise versus the U.S. dollar in more than 2 weeks. According to an article in the Independent newspaper and a spokesman for U.K. Prime Minister Theresa May, Article 50 will not be triggered this week. In today’s vote, the House of Lords overwhelming opted to overturn the amendments to the Brexit bill.

This sends the bill back to the House of Lords who are unlikely to reject the will of the people (although if they do we could see more back and forth). Once both Houses of Parliament agree on the language in the bill, it would be sent for Royal Assent and become law, whereby allowing May to trigger Article 50. So how quickly Article 50 is triggered will be partly determined by how quickly the House of Lords accepts the House of Commons’ decision.

If Article 50 is not triggered until next week, we could see a further short squeeze in the oversold currency but if Prime Minister May suddenly announces the trigger this week, traders can expect a knee-jerk breakdown in GBP hat should not last for long as investors realize that it will be months before the terms of exit are agreed to with the E.U. and years before an official exit happens. So in the meantime, it appears that the risk is to the upside for sterling.