- GBP/USD bears attacking the 20-DMA ahead of MPs returning from recess.
- Conservative MPs have been warned not to rebel against the government.
GBP/USD has been struggling in a strong dollar environment and a weaker euro clearing out downside orders on Friday while Brexit headlines continue to roll in as markets await parliament to return after recess. The pound is trading in the 1.2139 and 1.2160 range at the start of the week while losing trading conditions should be expected with the US holiday.
Brexit is back on the agenda
The latest update on the Brexit front is that Conservative MPs have been warned not to rebel against the government as opposition MPs plan a law to stop a no-deal Brexit. MPs return from their summer break for just a few days, as Parliament will be prorogued the following week. "Opposition and rebel MPs will do everything they can to frustrate Boris, including trying to cancel prorogation and demanding an extension to Article 50. But like this past week, expect an extreme, proactive response from No.10. An election may be in sight by week-end," analysts at TD Securities explained.
A senior source from the whips office - which ensures MPs vote in line with the party - said rebels would "destroy" their Brexit negotiating position, BBC News has reported today, "Rebels will have the whip withdrawn and be deselected, the source said. It comes as Labour's shadow cabinet is to meet on Monday to finalise plans aimed at stopping no deal."
On Sunday, Prime Minister Boris Johnson discussed with his whips plans for dealing with potential rebels. The senior Conservative whips office source said if Tory MPs "fail to vote with the government on Tuesday they will be destroying the government's negotiating position and handing control of Parliament to Jeremy Corbyn".
"Any Conservative MP who does this will have the whip withdrawn and will not stand as Conservative candidates in an election."
Rebelling will be classed as voting against the government or abstaining.
There is a chance of a deal on 17 October - the date of the next EU summit - "only because Brussels realises the prime minister is totally committed to leaving on 31 October", the source said.
"All MPs face a simple choice on Tuesday - to vote with the government and preserve the chance of a deal or vote with Corbyn and destroy any chance of a deal."
GBP/USD levels
GBP/USD dipped back to test below the 20-day moving average at 1.2153. "Provided this holds the downside, we look for recovery to the 55-day ma at 1.2384 and the June high at 1.2784," analysts at Commerzbank argued.
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 edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.