Sterling slips as traders digest the fact that parliament is almost certainly not going to pass a meaningful vote on the Brexit deal
The scarce details of the agreement basically shows how unfavourable it is for the UK parliament to vote in favour of May’s Brexit deal. And traders are starting to factor that into the pound right now.
We may get Cabinet’s approval and a November summit in Brussels to come. However, as mentioned earlier, all that counts for nothing if what they’re working towards is a deal that will only result in parliament rejecting it.
As highlighted earlier in the day, if parliament rejects the deal, it would result in three possible outcomes and all of them are negative for the pound. The trade now is going to be all about May’s chances of getting parliament to pass the meaningful vote.
And those chances at the moment are slim to near impossible.
Cable now slips back below the 100-hour MA (red line) and the near-term bias is now more bearish again. A fall back below the 23.6 retracement level @ 1.2910 would see a quick move back towards 1.2850 and this week’s low of 1.2828.