The British pound today recovered from its monthly lows, where it was due to the risks associated with Brexit.
The pound rose after the representative of the European Court stated that the UK could cancel the decision on Brexit without the consent of other EU countries. The conclusion of the European Court will be given a little later, but, as a rule, it coincides with the opinion of the representatives of the court.
According to the adviser to the European Court of Justice, Manuel Campos Sanchez-Bordona, the UK government has the right to unilaterally withdraw the decision from the European Union. If such a decision is made, the consent of other EU members is not required for this.
On the one hand, this has eased the pressure on the British pound, but the current conclusion is unlikely to lead to a larger increase in the future. The whole movement will continue to be built on the decision of the British Parliament, which will be announced on December 11.
Today's statement by the adviser to the European Court also creates a number of problems for British Prime Minister Theresa May, which will make it even harder to convince parliamentarians of the need to sign an agreement on Brexit. Any arguments of Theresa May can be refuted by the possibility of unilaterally making decisions and completely abandoning Brexit without economic problems for the UK, thus avoiding an uncontrolled exit of the country from the EU.
However, it should be noted that the current decision does not mean that the UK will not have to fulfill a number of conditions. If it is suddenly decided to maintain EU membership, the UK Parliament will also need to approve it.
The data released today on the purchasing managers index for the construction sector supported the British pound in the morning.
According to a report by IHS Markit, the purchasing managers index for the UK construction sector rose to 53.4 points in November from 53.2 points in October. A value above 50 indicates an increase in activity. IHS Markit noted that strong growth was directly related to overall performance in the construction sector, and not in particular in any particular area.
Regarding the technical picture of the British pound, despite the large growth today in the first half of the day, the further upward trend is limited by the same large resistance level around 1.2840, which was not possible to get outside last week. Only the breakthrough will lead to a stronger correction with the highs around 1.2880 1.2930. In the event of a decrease in the pound, which may occur at any time on the Brexit news, support will be at least last month around 1.2720, a breakthrough which will result in a major sale in the 1.2660 and 1.2570 area.
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