- The UK parliament prepares for indicative votes later today (Wednesday 27th March, scheduled for the evening) as the 29th March initial Brexit deadline draws closer.
- Parliament has scheduled 16 (yes, sixteen) options to choose from, increasing very short-term uncertainty.
- Although the Pound remains hesitant in the short-term, the underlying tone remains solid versus both the US Dollar and Euro.
- More recently on Tuesday, Prime Minister Theresa May’s Brexit deal received a somewhat unexpected boost as two Eurosceptic members of her own party (Jacob Rees-Mogg and Michael Fabricant) seemed to indicate they may be willing to vote for her deal, with few other options now available.
- Our focus today on the Pound is reflected by the much-watched Forex rate versus the US Dollar, GBPUSD, commonly referred to in currency markets as Cable.
GBPUSD bias stays higher
A dip and a rebound from just above our 1.3149 support (from 1.3157) for another probe higher Tuesday (as on Monday) to prod above 1.3247/51 resistances, reinforcing last Friday’s dip and firm bounce from just below our support at 1.3087 (from 1.3079), leaving the bias higher into Wednesday.
The aggressive, mid-March advance through the late February peak at 1.3350 switched the intermediate-term outlook to bullish.
- We see an upside bias for 1.3261; break here aims for1.3311 and 1.3331, maybe to the cycle high at 1.3381
- But below 1.3157/49 opens risk to 1.3079, maybe down towards 1.3004/03.
Intermediate-term Outlook – Upside Risks: We see an upside risk for 1.3473.
- Higher targets would be 1.3608 and 1.4000
- What Changes This? Below 1.2947 shifts the intermediate-term outlook straight to a bear theme.
4 Hour GBP/USD Chart