My doubts stem from an article in the web which stated "Simple linear regression is a statistical method that allows us to summarize and study relationships between two continuous (quantitative) variables."
Is simple linear regression a test of relationship between two continuous variables only, or can a categorical variable with two levels be used to form a simple linear regression equation?
Simple linear regression is a model of the following form $$ y=\beta_0 + \beta_1x+\epsilon, $$ where $\epsilon\sim \mathcal{N}(0,\sigma^2)$, $\beta$ are parameters and $x$ is statistically constant, hence $y \sim (\beta_0+\beta_1x, \sigma^2)$. So, the dependent variable $y$ have to be continuous, while $x$ can be discrete or continuous. Where $x$ is categorical variable, this model is called One-Way-ANOVA. In this case, you mostly interest in comparison of means of $y$ between various levels of $x$.