GBP and Brexit outlook
- EU and UK sealed Brexit deal in a 26-page political padding
- GBP slightly rose on Brexit news, struggling to break above key resistance
- Downside risks remained on shorter term, as Brexit may not pass through the British Parliament
- PM May’s Conservative 7 votes behind on Brexit issue, as Northern Irish Party DUP opposed
As the UK PM will be spending her next couple of days to convince UK and British Parliament regarding the importance of Brexit deal, GBP bull remains sluggish. In the face of upcoming vote ahead of Brexit deal in the British Parliament, the EU had warned that this was the “Best Possible Deal” Britain could ever get. The vote is expected to happen on December 10thand in its recent condition, the vote might not pass through the House of Commons, as PM May’s conservatives are 7 votes behind the oppositions. The next few days would be full of Brexit events in the Media and positive headlines would improve the GBP outlook, which is lacking momentum right now, amidst growing concern over the passing of Brexit deal. Until December 10th, market appears to be volatile for GBP
British Parliament outlook on Brexit deal
At this moment, the Conservatives hold 314 votes excluding two members who were initially in the parliament, but later had been expelled. PM May could expect those two votes as well. On the other hand, the oppositions were holding 313 voting, until a small Norther Irish party, DUP, declared that they would be opposing the Brexit. As DUP held 10 seats in the parliament, the Brexit supporters would be 7 votes behind. The main opposition, Labor party has 255 active lawmakers declining to support the Brexit deal. Alongside, Labor party, the Scottish national party having 35 seats, Liberal Democrats with 12 seats, Welsh Nationalists with 4 and Green Party holding 1 seat, will be opposing the Brexit deal. As an aftermath, the Brexit opposition are 7 votes ahead with 323 votes in the 650-seat British parliament, which is grievously hurting the Pound upsurge.
A deal between the UK and EU supposed to provide GBP a healthy boost, yet GBP has shown mild appetite towards the sealed deal, as it rose slightly rose in the Asia Pacific session. However, while this report is being written, GBP is being traded in a tight margin below 1.2840. Euro outlook remains withering, although there had been improvement in the Italian budget issue.
GBP/USD daily price chart
While remained well below 1.1350, the Yen is falling on an upbeat market mood. The USD remained soften during the Asia Pacific session, however a rebound has jumpstarted, jolting the USD upward to 96.46.
For the next few days, the market appears to be full of Brexit news and positive headlines would aid an upsurge. As, Brexit is lacking 7 votes to pass it through the House of Commons, Market remains highly unresponsive to EU-UK sealed Brexit deal and a bearish move is looming large in a near-term outlook, where the recent support level would be lying around 1.2775-1.2800 area and if it is broken, further key support is at 1.2720-1.2662 (17 months low). On the flipside, positive Brexit news on the British parliament would definitely launch a skyrocketing move, where the key resistance is lying around 1.2980-1.3010 region.
Read more on Brexit here
[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]