- The UK government is winning the third vote as MPs vote on Lords amendments to the EU withdrawal bill.
- GBP/USD testing the bear’s commitments at 1.3420.
GBP/USD has rallied to test the bear’s commitments at the top of the descending channel at resistance on the back of the government winning the third vote as MPs vote on Lords amendments to the EU withdrawal bill. GBP/USD is currently trading at 1.3421, having made a session high of 1.3425 at the time of writing from a low of 1.3341.
From the Guardian:
First, “MPs voted to reverse the Lords amendment removing the “exit day” from the bill by 326 votes to 301 – a majority of 25. That means 29 March 2019 is going back in the bill as exit day.”
Then, “MPs voted to reverse the Lords amendment removing the “exit day” from the bill by 326 votes to 301 – a majority of 25. That means 29 March 2019 is going back in the bill as exit day.”
“MPs are now voting to remove another exit day amendment.”
There will be more to come over the next couple of days and the following insights from TD Securities offer a good foundation to be prepared when trading the cross, EUR and cable:
- Brexit: the 15 amendments in brief – TDS
- Brexit: likelihood of key amendments passing – TDS
- Brexit: FX market outlook & strategy looks to 0.8965 or 0.8700 – TDS
Meanwhile, cable had otherwise been offered due to the below-forecasted earnings data from the jobs report in the London session today; (Headline earnings +2.5%, ex-bonus earnings +2.8%, both were 0.1% and below forecasts) 1.3380 was hit on the knee-jerk and a high of 1.3418 was touched on the volatility before the data, (the larger than expected rise in employment was the silver lining for cable bulls overnight, 146k vs 110k forecasted).
All eyes on central banks
Traders will stay tuned into Brexit noise where the UK Prime Minister faces a series of challenging parliamentary votes on her plan to leave the customs union and single market after Brexit, but it will soon be time for the ECB and FOMC. The ECB is likely to be all fireworks and chaos should there be mixed messages about timings of the central bank’s massive bond-purchasing programme while the Fed could surprise one way or the other as well, depending on how dovish the rate hike is or whether they will factor in a fourth rate hike in 2018.
GBP/USD levels
On a break of this resistance at 1.3420 and then 1.3440, Bulls will set their target for a test of the 200-D SMA at 1.3601. The convergence of the 200-D SMA and 1.3600 tops comes as crucial level while the 1.3708 level at the 50% Fib of 1.3040-1.4377 remains compelling on the wide. To the downside, on a break of the 21-D SMA and the 10-D SMA ahead of the daily channel’s support line at 1.3202 and recent lows, 1.3040, as the Nov 3 low, comes next.
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