- GBP/JPY struggles around multi-month top marked last-week.
- UK’s special Parliament session on Saturday favored Letwin Amendment, poured cold water on expectations of a meaningful vote on the Brexit bill.
- UK PM followed the law to request the Brexit extension, EU’s response awaited.
With the United Kingdom’s (UK) special Parliament session throwing a wild card to the British Pound (GBP) optimists, GBP/JPY begins the week on the back foot while taking rounds to 140.10 at the start of Monday’s Asian session.
Rather than a debate and vote on the UK Prime Minister’s (PM) Brexit deal with the European Union (EU), the British Parliament rather tabled and passed Oliver Letwin’s amendment. As per the Westpac, the amendment was intended to ensure that there could not be an unintended no-deal exit should the legislation around the proposed Withdrawal Agreement (WA) stutter and collapse.
As a result, the UK PM’s recent struggle failed to witness a happy weekend as he had to write a letter to the EU demanding another extension to the Brexit. The European Council President Donald Tusk confirmed receiving the letter but no reaction was conveyed. The EU leaders also met during the weekend but refrained from discussing delays while holding hopes to push over the deal, as per the market reports.
“European ambassadors met for all on the15 minutes this morning and did not discuss a new Brexit delay It is full-on ratification on the EU side mirroring the government’s push to get the deal across the line. If a longer political extension is needed beyond Feb 2020 because ratification breaks down or Johnson loses vote of no confidence than EU will need a summit - as early as 27/28 October. The most likely option, I am told is for EU to decide the Benn act’s three months extension is “technical” as long as early WAB votes go smoothly”, tweeted The Times’ Bruno Waterfield.
Hence, the Brexit drama will keep the GBP traders on their toes during the week with likely progress and a meaningful vote on the WA bill during the same period. However, the opposition Labour party is all set to attach another referendum during this week’s Parliamentary load and will add burden on the UK’s policymakers.
With this, risk tone remains a bit compressed with early Asian session witnessing little moves. Contrary to the sentiment was the South China Morning Post’s (SCMP) story signaling ‘concrete progress’ towards trade was deal in Washington.
Technical Analysis
Unless breaking below 200-day Simple Moving Average (SMA) level of 138.70, prices will keep aiming early-2019 lows nearing 144.00-143.80.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.