GBP/USD trimming into 1.2900 as markets brace for Brexit vote
- Tuesday's mega Brexit vote comes in for a landing, all eyes on the UK's parliament.
- With a no-vote almost guaranteed, Britain's options are limited to either find an alternative route out of the EU, or face a hard exit.
GBP/USD is trading just shy of the 1.2900 major level heading into Tuesday's Brexit bombshell showdown between Prime Minister Theresa May and the UK's House of Commons; PM May's current Brexit proposal is currently slated to suffer a resounding defeat within the British parliament, and it remains unclear what direction the Brexit ship will steer following May's long-awaited parliamentary defeat.
Reuters poll: All respondents expect Parliament to vote down PM May's Brexit deal
The future looks uncertain for Theresa May's government following Tuesday's vote, though the results aren't expected to surface until much later in the day, between 19:00 and 21:00 GMT; May's camp will have just three days to present an alternative deal to the parliament following her current plan's almost-assured defeat, while a parliamentary no-confidence vote in PM May's government is also on the cards after this vote wraps up; the only bright spot in the current political quagmire is the possibility of extending Article 50, delaying Brexit and giving the UK time to actually get some work done on Brexit. Though May and her Tories are quick to torpedo suggestions of extending the Brexit period, Mrs. May won't get much say in what happens if her government is forcibly dissolved by the House of Commons.
GBP/USD Levels to watch
The Cable has enjoyed a brief reprieve from broad-market selling in recent days, allowing the pair a chance to turn moderately bullish, as noted by FXStreet's Valeria Bednarik:
The pair is short-term bullish, trading a handful of pips below the 1.2900 threshold, and with technical readings in the 4 hours chart supporting a continued advance, as the 20 SMA gains downward traction over 100 pips below the current level but above the 200 EMA, this last at around 1.2735. Technical indicators have reached overbought readings before losing their upward strength, now consolidating. High volatility is expected for this Tuesday ahead of the final vote, with the focus then on whether the government can come with a plan B or give up and go for a no-deal Brexit.
Support levels: 1.2865 1.2830 1.2805
Resistance levels: 1.2930 1.2960 1.3000