Big slippage in GBP/USD on turnaround victory for the government on trade bill amendment
|- UK government won the vote on the trade bill amendment defeating the rebellion by pro-EU conservative lawmakers.
- Cable dropped in anticipation of defeat, but snapped back on the outcome.
- Brexit voting outcome should be sterling positive so the upside has the the 50-D SMA located at 1.3318, around a weekly cloud top level.
GBP/USD has been all over the place, initially in freefall on the back of the reports that Tory rebels were being threatened with a general election if they defeat the government of a new clause 18 - GBP/USD was trading between 1.3069/gapping up to 1.3150 in a blink of an eye when dealers were frantic and the slippage had been huge.
Commons have votes 307 to 301 to reject NC18 of the Trade Bill. This clause would have required the UK Government to make it a negotiating objective to establish a free trade area for goods with the EU or otherwise to enable the UK's participation in a customs union with the EU. The pound was already on its knees on the fact that Theresa May lost on the Phillip Lee amendment which suggested the government would lose this vote too.
UK government won the vote on the trade bill amendment
However, the UK government won the vote on the trade bill amendment defeating the rebellion by pro-EU conservative lawmakers. This victory is absolutely massive for Theresa May because it now means that she can negotiate with the EU27 with them knowing she can (just about) command the will of the House of Commons. Also, government chief whip Julian Smith told Tory MPs that he would have called a no-confidence vote in government on Wednesday had that pro-Europeans won customs union vote. All in all, this customs union vote was crucial and there were not enough of the rebel former remainers who were prepared to vote against the government in the end.
GBP/USD levels
The 10-D SMA stops were triggered to the downside on this volatility that was guarding the descending channel's prior resistance, also pierced on the move. Bears look to break through this channel to the 1.3000's where the 1.3040 level is key, (1.3069 low scored so far) as the Nov 3 low. Further lower, eyes will turn to the 1.29 level. However, the outcome of this should be sterling positive so the upside has the 50-D SMA located at 1.3318, around a weekly cloud top level. 1.3461/80 comes before the convergence of the 200-D SMA and 1.3597/1.3600. The 1.3708 level at the 50% Fib of 1.3040-1.4377 remains compelling on the wide.
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