Yesterday, the British Prime Minister gained annual immunity from the actions of her opponents. Late in the evening, the parliament announced her a vote of confidence. Now, this question has been removed from the agenda for a long time, although earlier the likelihood of impeachment had disturbed traders and put pressure on the pound.
After the announcement of the results of the secret ballot, the British currency almost remained in place. The fact is, such results were fairly predictable. Just yesterday, in the press, information appeared that Theresa May was supported by about 150 deputies. On this insider, GBP / USD showed corrective growth throughout the day, but May's victory failed to betray the pair of northern impulses.
First of all, the number of deputies who voted for the no-confidence vote is alarming, 117 parliamentarians. Firstly, this suggests that the number of intra-party opposition is growing. As experts had previously believed, the number of ardent opponents of May fluctuated between 50-80 deputies. Secondly, the results of the voting speak of weak prospects for approving the Brexit deal, at least in its current form. On the one hand, the results of yesterday's voting cannot be categorically projected with the Brexit question, but, on the other hand, the premier needs to consolidate the positions of all conservatives and unionists (or laborers) to approve the deal. And given the number of voters who voted for the no-confidence vote, we can conclude that this will be very difficult.
However, Theresa May is taking decisive steps to strengthen her success. In order to level the disappointment of those deputies who voted against her, she made quite a resonant statement. She told parliamentarians that she would resign anyway before the next elections, scheduled for 2022. In this way, she "poachs" yesterday's opponents to her side, reducing the degree of political tension and increasing the significance of the key vote on Brexit. Therefore, identifying opponents of May with opponents of Brexit is not quite right, given the possible consequences of a chaotic exit from the EU and the premier's promise to voluntarily resign.
At the same time, the prospects for "soft" Brexit are quite elusive. As I said above, the premier does not have enough support for her party members. The deal must be supported by unionists, whose representatives continue to insist on excluding the backstop provision from the deal. EU leaders have already made an unequivocal statement that they will not reconsider the terms of the deal, which means that May will not receive support from her coalition allies. Representatives of other political forces are either categorically opposed to the deal as a whole, or they voice certain conditions. Again, regarding backstop. According to a number of deputies, Europe should give guarantees that this regime will have a "shelf life", which will be legally executed. Actually, now this issue is at the top of the agenda. If Brussels says no, then the situation will return to normal, and the optimism of the GBP / USD traders will quickly turn into pessimism.
According to preliminary information, the EU representatives do not intend to make concessions and at today's meeting with the British Prime Minister will reject all her requests. But it is worth noting here that Theresa May's task is not to revise the agreement reached. For her, it is important to obtain political or legal guarantees regarding the limited period of the Irish backstop. In this context, Brussels can make concessions (after all, they are also interested in soft Brexit). In particular, one of the European Commissioners said today that the European side can add "certain clarifications" to the transaction approved by the European Union. Whether the British side is satisfied with this answer is unknown, but the chances of reaching a compromise solution without revising the transaction are quite high.
Thus, Theresa May won an important battle yesterday, but far from a war. Now, much depends on the position of Brussels. If today's meetings bring results, the prime minister can still have time to submit a draft deal to the British parliament. Otherwise, this issue will be transferred to the middle of January next year, as the deputies go to the New Year holidays, from December 20 to January 7.
In terms of technology, the pair is on the daily chart between the middle and lower lines of the Bollinger Bands indicator, but also on the Tenkan-sen line of the Ichimoku Kinko Hyo indicator. If the price consolidates below 1.2650, then the above indicator will form a bearish signal "Parade of lines". In this case, the probability of a price reduction to the level of 1.2555 (the bottom line of the Bollinger Bands indicator) will increase. The immediate goal of the northern movement is the price of 1.2740 (the middle line of the Bollinger Bands). However, if London and Brussels reach a compromise, the pair will soar at least in the region of the 28th figure.
The material has been provided by InstaForex Company - www.instaforex.com