Earlier fall (and technical breaks) fail
The GBPUSD fell early in the session on the back of news that PM May asked for a 3 month extension and implied a 3rd meaningful vote (on something). The proposed "can kicking down the road" was past the EU elections toward the end of May (which the EU has said they don't like). Would the EU allow it? It seemed they might not.
Then there is the 3rd vote. We know from the speakers bombshell that the next meaningful vote has to be different than the 2nd. - which really is not that surprising. As a result, what will be voted on, is up in the air. Then there is the problem, that a passed meaningful vote (if possible) would then need to be approved by the EU 27 unanimously. Is that possible?
That news sent the the GBPUSD below the 200 hour MA and stops were triggered at 1.31917. The low reached 1.3147.
Since then there have been more headlines from the UK and the EU
- If May cannot offer guarantees Brexit deal will be passed, extension to be turned down
- May could deliver a speech tonight outside #10 Downing
- France says Macron veto of Article 50 extension is 'pure speculation'
- EU official says May's Article 50 extension request came too late to make decision Thurs
Will May resign? Will she plan her stepping down? Then, if she does, the new PM has the same issues and landmines to navigate internally (with the lawmakers) and externally (with the EU 27). What a mess.
So, the GBPUSD price action is a mess too....
The price fall reversed and moved back above the 200 hour MA. It also moved above the 1.3200-05 area as well on the way to a corrective high of 1.3218. That should not have happened in a perfect technical world, but remember it is a mess.
We are back below the 1.3200-05 right now and trading above and below the 200 hour MA at 1.31917.
It seems to me, no-deal and a ticking clock, should keep a lid on the pair. However, the winds of change are a whipping and so is the market.
For those that have gotten whipped around, it is hard to predict what may happen, and as a result, the market (and price action) suggests less liquidity and more choppy trading that can tumble lower, squeeze higher, tumble lower and squeeze higher. Tough stuff.
For me, watch the 1.32057 area. Stay below now, keeps the sellers more in control. That would be my preference.
On the downside, the 50% at 1.31695 needs to be re-broken.
If the 1.32057 level is broken (to the topside), the "mess" continues. It is what it is....
