Midway between low euphoria and low anxiety is inertia, for sterling
A six-month extension offers breathing space that could facilitate a break through, so optimists say. Note sterling continued catching up on its sleep after reports that the Prime Minister Theresa May is “willing to talk” about a customs union with Labour.
An election could occur sooner than parliamentary agreement. May would have to resign first though and she’s not a quitter, whilst toppling her won’t be easy. She’s not obliged to obey a no-confidence vote and Conservative Party members aren’t allowed to table another one till 2020 anyway.
MPs may find it just as difficult to agree to another referendum. European elections—which Britain must now participate in—could serve as a ‘public vote’. A pro-Europe outcome could delay Brexit further, rather than ending it. A pro-Brexit one could increase chances that the EU finally throws in the towel. Another extension isn’t guaranteed in any case, after France’s President Macron led demands for harsh conditions and even rejection. Continued hiatus till 31st October seems the line of least resistance. By default or design, Britain’s new Halloween deadline signifies that the Brexit nightmare is far from over.
Inert cable is coiling into even narrower ranges than those prevailing since February. Support can be marked off by the 100-hour average. Resistance has consisted of late-$1.31 highs all month. Look for accelerated momentum when this conduit breaks. Then get set for the rate’s return to its prior, somewhat wider, range. Possibly forever.
Sterling/U.S. dollar – hourly [11/04/2019 15:58:25]
Source: Tradingview/City Index