Boris Johnson has been claiming a no-deal Brexit since he succeeded Theresa May as UK’s Prime Minister in July of 2019. Perhaps his demands were a bit too loud, because the opposing labor party in parliament was not following.
MPs have been fighting PM Johnson to stop a no-deal Brexit since early September, when he attempted to suspend parliament until mid-October. As a reminder, the current Brexit deadline is October 31st. He stated that his move was to outline and bring forth new and exciting agenda to the UK, but parliament as well as other opposition did not buy it. Parliament fought back and took control of government.
There was a threat at the time from Johnson, that he would seek a snap election should MPs vote against him, but that did not go through as PM Johnson sacked 21 MPs from the parliamentary Conservative Party after they rebelled against him. His party no longer holds the majority vote.
The British pound has been on a rise even since Parliament started aggressively fighting back against a no-deal Brexit. The price moved to the highest level in two months at 1.25820 on September 20th on the optimism that the UK won’t leave the EU without a deal.
On a 4HTF, the peak created at 1.25820 looks like the head of a head and shoulders pattern, pointing towards the end of the bullish spree.
In the latest Brexit developments, today, the UK Supreme Court ruled that PM Johnson’s move to prorogue parliament was indeed unlawful. The UK Supreme Court’s decision was unanimous and the Supreme Court’s president, Lady Hale, stated “The effect on the fundamentals of our democracy was extreme,” adding, “The decision to advise Her Majesty to prorogue Parliament was unlawful because it had the effect of frustrating or preventing the ability of Parliament to carry out its constitutional functions without reasonable justification.”
As a result, the British pound rose but even after worse than expected US CB Consumer Confidence, the price could not break the resistance at 1.25032.
We’ll have to continue to monitor the situation in the UK, the euro area, and the United States to determine further price movement. The price is currently between a very strong resistance level at 1.25032 and a very strong support level at 1.24254.
Tomorrow at 17:00, the US releases data on New Home Sales and Crude Oil Inventories at 14:30 GMT.
If GBPUSD bulls break the resistance at 1.25032, our targets up will become further resistance at 1.25583, and the created high at 1.25820. Which will be followed by July support level that will become a resistance one at 1.26468.
If bulls have run out of steam and GBPUSD bears move the price below the 23.6% Fibo level, and break support at 1.24254, our targets down will become 38.2% Fibo at 1.23437, followed by 50% Fibo at 1.22702 and then 61.8% Fibo at 1.21966.