GBP/USD: Increased odds of No deal Brexit post-May’s plan failure

• GBP/USD trades near 1.3080 ahead of London open on Wednesday.
• The pair seesaws as no deal Brexit and Article 50 delay are on the radar after the meaningful vote in the UK parliament.
• 1.2980 becomes a strong support for the quote with 1.3180-85 likely limiting immediate upside.

GBP/USD seesaws around 1.3080 while heading into European sessions on Wednesday. The quote dropped recently after the UK PM Theresa May lost voting on her second Brexit proposal, increasing odds of a no deal British exit from the EU. However, chances that the parliament may still insist on leaving the EU with a good deal in today’s voting round offer intermediate relief to the pair.

On Tuesday, the British PM May had to face another disappointment after months of tiring efforts as members of the UK parliament (MPs) rejected her second Brexit proposal. With this, the UK MPs are given an opportunity to vote on leaving the region without any deal on Wednesday, which if failed could give rise to voting on Article 50 delay on Thursday.

In spite of expectations that the UK lawmakers will vote down a no-deal Brexit scenario, chances are high that Britain may end up exiting the EU region without any deal. The reason being EU policymakers’ tough stand against the UK. In their latest communication, the EU Commission chief Jean-Claude Juncker and the EU President Donald Tusk both sound in no mood to appreciate the British political game.

As per CNBC, Juncker said in Strasbourg that there won’t be a third chance for PM May on negotiating table if her second proposal gets rejected, which eventually happened. On late-Tuesday, Donald Tusk was reported saying that the UK house of commons vote ‘significantly increased’ the likelihood of a no-deal Brexit. Further, EU to decide by unanimity on any UK request to delay Brexit and will expect credible justification for any Brexit delay.

Hence, May’s failure to please British politicians may offer no deal Brexit to the markets and can negatively affect the British Pound (GBP). Though, today’s voting results can trigger GBP/USD pullback if supporting an exit with the deal.

GBP/USD Technical Analysis

Not only ten-week-old ascending support-line but the 200-day simple moving average (SMA) also highlights the importance of 1.2980 rest-point.

On the flipside, sustained break of 1.3180-85 may recall 1.3260 and 1.3320 on the chart.