Deadlock in the British parliament, coupled with the strengthening of USD as a safe haven currency, is likely to dominate price action in GBPUSD. The bullish trend established since the beginning of 2019 looks precarious.
The first green vertical marks Friday 29th's rejection of Theresa May's Brexit deal. The next major events AS THINGS STAND will be as follows:
Mon, 1 April: Parliament votes on various Brexit options to break deadlock: Failure to do so = probable further GBP decline.
Wed, 3 April: Potentially another round of votes if 1 April failed. Failure here again = probable GBP decline.
Wed,10 April: Emergency summit of EU leaders to consider Brexit deadline extension. If an extension is approved = GBP may rally.
Fri, 12 April: Brexit Day.
Things to note:
1. The French government has repeatedly suggested an extension on the 10th April is by no means certain and that it does no good to prolong the "inevitable".
2. Parliament has now failed three times to break the impasse.
3. Even with the prime minister's offer to resign once the deal is passed it was still rejected.
With the ongoing weakness in the Eurozone coupled with no major news on rates either from Brussels or the Fed it is fair to assume that GBP will continue to make further losses as USD gains traction as a safe house until the picture is clearer one way or another.
The first green vertical marks Friday 29th's rejection of Theresa May's Brexit deal. The next major events AS THINGS STAND will be as follows:
Mon, 1 April: Parliament votes on various Brexit options to break deadlock: Failure to do so = probable further GBP decline.
Wed, 3 April: Potentially another round of votes if 1 April failed. Failure here again = probable GBP decline.
Wed,10 April: Emergency summit of EU leaders to consider Brexit deadline extension. If an extension is approved = GBP may rally.
Fri, 12 April: Brexit Day.
Things to note:
1. The French government has repeatedly suggested an extension on the 10th April is by no means certain and that it does no good to prolong the "inevitable".
2. Parliament has now failed three times to break the impasse.
3. Even with the prime minister's offer to resign once the deal is passed it was still rejected.
With the ongoing weakness in the Eurozone coupled with no major news on rates either from Brussels or the Fed it is fair to assume that GBP will continue to make further losses as USD gains traction as a safe house until the picture is clearer one way or another.