GBPUSD During Next Brexit Fix,
[2019-01-30 10:50 GMT]
Technically, since 2019, as obvious as it is: Brexit is a disaster, British social awkwardness elevated to the scale of a constitutional meltdown prints non-stop rally that was taken aback by fund-managers, bankers, and traders. The disaster Brexit’s rally has siphoned 800 pips in just 20 trading days. What pattern did this rally damage? Notice the red lines that charted a descending triangle ahead of 2018 closing year. This triangle has played it well with one trick: all daily closes were triggered below the base line except the final day of the month: Dec 2018. Since then, the market rallies and the days below the base line fall under the notion of False-Break.
Further, the downsloping parallel green lines has received a resistance’s punch, marking a penetration that is so close towards the weekly moving average 100 (marked in blue rectangle). A weekly confirmation above MA100 and the next target becomes 1.3700+. This scenario negates if a close below the base line of the triangle is triggered.
Fundamentally, On Tuesday night Theresa May thought she had scored: a slender majority in parliament voted for an imaginary agreement in Brussels, stripped of the hated “backstop.” EU has already ruled out a renegotiation on terms that might satisfy the hardliners. The transient buzz of Tory unity will yield to the chilly comedown of Brexit reality, as it always does.
Some MPs can see the situation spiraling out of control. Today 298 lined up to demand an intervention. They backed a cross-party bid to seize control of the Brexit agenda from the government and delay the day of departure if necessary. But the move failed.
There is ample horror of the no-deal scenario across the Commons but clearly the greater fear is association with anything that looks like an active plot to thwart Brexit.
The idea has two parts: first, renegotiate the backstop that promises a frictionless Northern Irish border; second, if renegotiation fails, scrap the deal but salvage the transition period contained within in it. Then aim for an exit on WTO terms. It is a strange kind of compromise plan that offers no compromise.