Johnson’s Brexit timetable crashes in the UK Parliament
Once again, The UK Parliament faced two key votes on the future of a possible agreement on Brexit. In the first vote, Boris Johnson, achieved victory to approve a second reading of the Brexit agreement with the EU. However, parliamentarians rejected the three-day calendar proposed by the government.
This creates even more uncertainty. Before the voting was held, the UK PM warned about calling elections if his timetable was not approved. Johnson, after hearing the results, said he would pause the process until the EU announces its intentions in this regard.
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A possible no-deal Brexit underway? “The EU must decide how to respond to Parliament’s request for an extension. The government must take the only responsible route and accelerate preparations for an exit without an agreement,” said the Prime Minister. The decision to accept an extension by the European bloc is still pending, but with what Johnson has said, all roads seem to be leading to a no deal Brexit by October 31. In addition, it’s important to note that the PM could seek to call for a general election if the EU confirms an extension of the proposed deadline for Brexit.
Technical perspective for the GBP/USD pair
Following the vote in the House of Commons, the Sterling skyrocketed to test fresh daily highs around the 1.2999 zone. But then erased such gains across the board and plummeted below the 1.2900 handle. Ending the day in negative territory.
In the overall short-term view, Cable is consolidating well above the 50 SMA at H4 chart. Having found strong resistance around the 1.3000 round-figure. While the pair is hovering inside an extreme area established by the 100% Fibonacci extension, it’s expected that the bullish bias will start correcting, which has been strengthening since mid-October. There, it found dynamic support in the 200 SMA, gathering momentum to extend its bulls’ force against the US dollar.
If a corrective move happens at the current stage, GBP/USD could reach the 1.2700 region in the coming days. Nonetheless, it should be considered that a deceleration of the technical oscillators is signalling a decrease in the current bullish impulsive move.
As of writing, RSI is showing neutral conditions, favouring a flat stance on a short-term basis. The Momentum indicator is pointing downwards, strengthening the bearish momentum, which continues after the Government’s loss in the UK Parliament.