Parliament vote to reject no-deal Brexit
The pound recouped its Tuesday losses in the overnight trade and managed to breach the February high. Against the G10 basket, the pound gained between 1.50-2.00% while the EURGBP manage to hold the 0.8470 Tuesday’s low.
We still believe that the stage is very much set to delay its deadline as the UK Parliament rejected no-deal Brexit. Today on Thursday Parliament will again vote on delaying Brexit.
“That vote will take place on Thursday, and if it is passed – and the EU agrees to it – the UK will not leave the EU as planned on 29 March.
Mrs. May said there could be a short delay to implement a deal agreed in the next few days, or a longer delay if no agreement is reached.” BBC reported.
The cable spikes through the February 2019 high at 1.3350, rallies to 1.3380 shies at 50.0% fib reaction 1.3390/1.3400. It seems the stage is very much set up for the cable to go beyond 1.3400 level. Last three days price action has laid the support at 1.2960. A move beyond 1.3400 would unfold next leg of the rally towards 1.3580/1.3620 its 61.8% fib reaction.
We more focus on the daily RSI, which has been traced out a double top pattern. The RSI breakout needed to forecast a successful and safe rally further higher.
Besides, the euro cross EURGBP manages to hold the 0.8470 Tuesday’s low. There is a Brexit vote story going on which develops some sharp GBP moves. It will be interesting to see if we close below 0.8470-0.8450 zone by today. Note that the daily RSI has been stabilizing around 35 levels, based on this fact we expect the downside risk is limited to 0.8400/0.8380 levels (two-day forecast).
The resistance stands at 0.8560 and 0.8650/0.8675.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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