23.10.201900:45 Forex Analysis & Reviews: GBPUSD and Brexit: Brexit deal may be approved, but its opponents have one more trump card

The pound slightly fell in the morning after reports that the UK government may withdraw its Brexit bill. If the British Parliament votes against the deal today, official London may withdraw the bill he proposed. This will jeopardize the work of Parliament, which will lead to the next election, which may take place before Christmas. Such a situation, of course, does not suit Brexit supporters in the Tory party, nor the Labour Party, nor other parties.

In the meantime, discussion of the bill itself has begun, and the debate may last until late at night, which will periodically exert pressure or support to the British pound. However, many lawmakers would prefer to have more time to study the conditions proposed by Johnson, which has been repeatedly stated. But here we are already talking about moving the Brexit date from October 31 to 2020, which clearly does not suit Boris Johnson.

Even if the prime minister succeeds this week in approving the deal in Parliament, and this happens only if the date of the deal on UK withdrawal from the EU is extended, in the future this scenario will allow amendments to the bill that could completely bury the deal.

Johnson now has a much better chance of making a deal than ever, since on the weekend he secured some support from the Laborites and opponents of Brexit in his Tory party. Just a few votes can allow Johnson to win. However, as I noted above, under the scenario, if Johnson's deal is not ratified, Britain will have general elections and even a referendum on the exit and the EU.

As for the technical picture of the GBPUSD pair, the pound only slightly fell against the US dollar, and this did not lead to significant changes. If the deal is approved, it is unlikely that the pound will break above resistance at 1.3040, which will lead to further growth of the trading instrument in the area of highs 1.3170 and 1.3260. If lawmakers are able to resist the government, then the pressure on the pound will increase, and the decline in GBPUSD under the support of 1.2840 will increase the pressure on the pair even more, which will lead to the demolition of a number of stop orders and a fall to larger lows of 1.2840 and 1.2670.

EURUSD

In the meantime, traders are closely following the news from the British Parliament, the euro is gradually falling against the US dollar.

This is due to expectations that the European Central Bank may resort to an even greater easing of monetary policy. The European Central Bank will hold its last meeting with Mario Draghi as the head this Thursday. It is expected that Draghi will "slam the door" and go for another reduction in deposit rates, or at least make direct allusions to such measures that can be implemented in December. In the case of this approach, it is not entirely correct to expect purchases of risky assets after a decision on Brexit.

From a technical point of view, further upward movement will occur only after the successful Brexit, otherwise the bears have already coped with the priority task and returned the pair to the support level of 1.1130, which gradually increases the pressure on buyers. Negative news will force them to close their long positions, pulling down the euro to the lows of 1.1090 and 1.1050.