15.01.201908:44 Forex Analysis & Reviews: Forecast for GBP/USD for January 15, 2019

GBP/USD

The main event of yesterday was the statement of the British Prime Minister Theresa May that the UK is not likely to withdraw from the EU, rather than it will leave the EU without a deal. The pound reacted slightly to the statement by growth, but this statement ultimately shows the inconsistency of the British establishment on the issue of Brexit from the very beginning of this venture. And despite the definitely disastrous mood of parliamentarians and observers regarding today's vote on the agreement, there is a possibility that the draft will be adopted. The fact is that the number of supporters against the existing agreement is rapidly decreasing. At the weekend, it was said about the advantage of 120 votes of "eurosceptics", on Monday about 100 votes, this morning about 60 votes... And this is despite the fact that all 256 Labor Party of the House of Commons is "against" voting a priori. So from these 60 it is possible to take away 10-15 more voices which will decide to vote against the party decision. And add 15-30 conservatives who change their mind "to plunge the country into chaos." We have already seen such a maneuver when the conservatives tried to express a vote of no confidence in Theresa May.

Thus, the outcome of the vote is far from a predetermined conclusion. And even if the agreement is not accepted, it is with minimal advantage. If that happens, then Theresa May will no longer find it difficult to postpone the date of the "X-Day" (March 29) and hold another vote on another agreement, in which one comma will be corrected.

So, the political situation returns to the scenario we talked about 1-2 months ago – the agreement will eventually be adopted. What will happen to the market? If the vote turns out to be "against", but with a minimal advantage, the pound may grow on expectations of a speedy re-vote, as the EU is ready to allow slight changes in the agreement. In this case, we expect the price to rise to 1.3045 with an attempt to overcome the resistance – the embedded trend line of the price channel with the top of 2014. If the vote is "for", the price will very quickly reach the target range of 1.3362-1.3444. The range is formed by a high of July 9, 2018 and a peak of September 2016. The upper limit of the range is also the resistance of the Krusenstern line on the weekly scale.

But if the vote turns out to be really a failure, then the pound decline is determined by the current target levels of the falling scenario: 1.2777 - support for the Krusenstern line on H4, 1.2680 – support for the trend line of the price channel on the daily, 1.2460 - lower support for the price channel.

But in case of a failed vote, May's supporters (positive establishment) have prepared countermeasures – an initiative group of conservatives is ready to immediately initiate the process of abandoning Brexit, which, of course, will soften and keep the pound from falling.