British Pound: USD/GBP (GBP=X) Parliament asks government to rule out ‘no deal’ Brexit permanently

British Pound: USD/GBP (GBP=X) Parliament asks government to rule out ‘no deal’ Brexit permanently

British Pound: USD/GBP (GBP=X) Parliament asks government to rule out ‘no deal’ Brexit permanently

UK lawmakers have voted to hypothetically take a ‘no deal’ Brexit off the table ‘for ever’ in a night of bruising losses for the government in the House of Commons that corresponded with another sharp rally in the value of the British Pound.

The night’s votes were aimed at seeking to establish whether the UK parliament should back a ‘no deal’ Brexit, and lawmakers gave a resounding answer.

The first motion which called for an indefinite rejection of a ‘no deal’ Brexit – which was not backed by the government – was unexpectedly passed by 312 to 308, a tight victory for ‘remainers’ and opposition parties. While not good for Prime Minister Theresa May and her government, and we are told this outcome is a positive for Sterling as it cements the notion that there is no political appetite for a ‘no deal’ Brexit to take place.

“A big win for the Pound – majority of MPs choosing economic rationale over party politics = reduction in risk premium. Also increases odds of getting certainty one way or the other (a deal or a push to avoid Brexit altogether),” says Viraj Patel, an analyst with Arkera in London.

The vote is not binding and therefore has no impact on Government policy, but it does have a ‘moral’ bind on the government.

The result certainly undermines the authority of May and her government which instructed its MPs to vote against the amendment and political commentators are saying the outcome is unexpected.

Amber Rudd, the work and pensions secretary, David Gauke, the justice secretary, Greg Clark, the business secretary and David Mundell, the Scottish secretary, were among the those government ministers who abstained, and ultimately saw the government lose the vote. Claire Perry, who attends cabinet as business minister also abstained while Sarah Newton, a junior welfare minister, quit the government to vote for the amendment.

The second vote for the night – which would have seen parliament request government delay Brexit to May 22 – was defeated by a heavy margin.

On the third vote of the night, parliament voted by a majority of 43 to rule out a ‘no deal’ Brexit. Note, that because the government lost the first motion unexpectedly, it was forced into suddenly whipping its MPs into voting against the motion. Thus, the government suffered its second loss of the night.

In response to the vote, Prime Minister Theresa May reminded the House of Commons “the legal default remains that the UK leaves without a deal unless something else is agreed.”

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 1.30.

The projected upper bound is: 1.35.

The projected lower bound is: 1.30.

The projected closing price is: 1.32.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 2 white candles and 7 black candles for a net of 5 black candles. During the past 50 bars, there have been 23 white candles and 25 black candles for a net of 2 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 65.9521. This is not an overbought or oversold reading. The last signal was a buy 3 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 56.83. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 10 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 78. This is not a topping or bottoming area. The last signal was a sell 9 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 5 period(s) ago.

Rex Takasugi – TD Profile

FOREX GBP= closed down -0.011 at 1.323. Volume was 26% below average (neutral) and Bollinger Bands were 8% wider than normal.

Open High Low Close Volume___
1.334 1.334 1.321 1.323 133,476

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 1.32 1.30 1.30
Volatility: 16 11 11
Volume: 177,344 171,032 178,555

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX GBP= is currently 1.9% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of GBP= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on GBP= and have had this outlook for the last 1 periods.

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