GBP/USD’s Overhead Resistance Holds As Article 50 Extension Vote Passed

The below is the daily chart of the GBPUSD.  On Wednesday cable moved aggressively up to challenge overhead resistance around the 1.3360 level (red shaded horizontal). This move was prompted by Wednesday’s UK parliamentary vote which rejected a “no-deal” scenario with the EU. However, resistance has held. Last night was the third UK parliament vote for the week, where a majority voted in favour of an extension to the Brexit deadline.

The failure to break through resistance is noteworthy here. PM May now has parliaments backing to go back to Brussels to request an extension which would give her time to persuade the antagonists to her deal  and within her own party to change their minds. This is unlikely and now a lengthy postponement to Brexit is a possibility. This will be seen as a “kicking the can down the road” scenario. Thus, the uncertainty regarding Brexit remains and headline risk is still considered to be high.

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