Sterling slips to session low as the plot thickens ahead of Brexit deal vote next week

Technical Analysis

Author: Justin Low | gbpusd

GBP/USD falls to a low of 1.2728 on the day

Labour party leader Jeremy Corbyn has confirmed a general election challenge will come about if and when May loses the meaningful vote next week but there is a bit more to that based on parliament's schedule for next week. With the meaningful vote set to take place on 15 January and parliament isn't sitting on 18 January, it would give the government up until 21 January (five days) to come up with a "Plan B" as opposed to the three days stipulated by yesterday's vote change.

Adding to that, the amendment only requires Theresa May to table a motion on an alternative plan by 21 January but not debate/vote on the motion. Then again, she likely won't have much time to concoct a plan as any vote on said motion will likely come about rather swiftly. (h/t Sun political editor @ tnewtondunn)

Not like that changes anything all too much but it only further complicates matters and causes further uncertainty about what to expect next week. That's not something that traders like too much and it's showing on the pound.

For cable, price now looks to threaten a move back below the 100-hour MA (red line) and that would break the near-term bullish bias in the pair. Support @ 1.2726 and the 200-hour MA (blue line) @ 1.2713 are next in line. The latter is key as a break below that will open up a shift towards a near-term bearish bias and sellers will then threaten a move back below 1.2700.

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