GBP/USD Forecast: Parliament's indicative votes and May's struggles indicate the next moves

GBP/USD is trading in familiar ranges below 1.3200.
Parliament is set to indicate alternative Brexit options and May faces her party.
The technical picture is mixed as cable awaits an indication.

Yohay Elam FXStreet

GBP/USD is trading slightly lower, but well within known ranges, as Parliament begins its process of indicative votes to point the way forward.

Parliament takes control, sort of

No less than 16 amendments have been tabled but Speaker John Bercow will likely filter it down to around seven. The options range from a no-deal Brexit to no Brexit at all. Softer Brexit options are also on the table. They include participation in the Single Market and in the Customs Union.

The opposition Labour Party has tabled options for a closer economic relationship with the EU and will also reportedly back a "confirmatory vote", voting for May's Brexit deal on the condition that it is approved in another referendum.

The initial debate will run until 15:00 GMT and tat the point the Speaker will announce the selected amendments. Voting is due at 19:00 GMT and it will take around 30 minutes. The winning votes will then advance to a second round of voting on Monday, April 1st.

It is important to note that Parliament's decisions today are non-binding and PM May said the government is not obliged by them, but they add to pressure on her.

May's moves

Pressure also comes from her own party. At 17:00 she will address the Conservative Party's 1922 Committee and may try to rally support for her accord. According to some sources, she may offer her resignation, or "fall on her sword" in return for MPs passing the deal.

On Tuesday, Jacob Ress-Mogg, the leader of the eurosceptic European Research Group, seemed to warm up to support the accord, fearing that Brexit may be lost. This was a significant development, but not all his colleagues are behind him.

Moreover, the Northern Irish DUP remains opposed to supporting the accord. If there are any movements on that front, the government could bring the agreement to Parliament, for the third Meaningful Vote (MV3).

All in all, the Brexit situation remains somewhat chaotic ahead of the new Brexit date, April 12th. The uncertainty somewhat paralyzed GBP/USD, but things can move fast.

See GBP/USD Forecast: 5 Scenarios for Big Brexit Wednesday, 4 pound-positive

Elsewhere, Fed nominee Stephen Moore suggested the Fed should slash interest rates by 50 basis points, a move deemed as radical. His comments did not move markets. US data disappointed on Tuesday with Building Permits, Housing Starts and Consumer Confidence all falling below expectations.

GBP/USD Technical Analysis

The Relative Strength Index on the four-hour chart is broadly balanced and upside Momentum has disappeared. Cable trades between the 50 and 200 Simple Moving Averages and lacks direction.

Support awaits at 1.3160 which supported the pair in recent days. The next cushion is 1.3115 which is where the 200 SMA meets the price. 1.3005 was a double bottom last seen last week and 1.2960 is the next level, the low point in March.

1.3225 held GBP/USD down last week and it is followed by 1.3260 that was a high point on Tuesday. 1.3315 capped cable last week and 1.3388 is the cycle high.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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