UK Parliament Votes Down Brexit Deal, Germany’s Annual Growth Slows

May’s Deal Gets Rejected by a 230-vote Margin

Yesterday, it was all about Brexit and UK Parliament’s vote over the deal agreed between PM Theresa May and the EU. Lawmakers voted down the accord as was widely expected, but the margin by which May lost was the largest in modern British history. Specifically, MPs voted 432–202 against the deal. Just after the vote, Jeremy Corbyn, the leader of the Labour party called for a no-confidence vote in May’s government, which is scheduled to take place today.

GBP/JPY — Technical Outlook

GBP/JPY had a volatile day yesterday, where the pair initially travelled around 300 pips down before the UK Parliament vote, and then straight after, it recovered about 90% of its losses. Of course, there is still a lot of uncertainty surrounding the UK political scene. From the technical side, the pair is trading back above its short-term tentative downside resistance line, drawn from the high of the 8thof November 2018. That said, in order to aim higher, at least in the short run, we would like to see a break through one of our key resistance areas first. That is why, for now, we will remain somewhat bullish and wait for the next move of GBP/JPY.

Germany’s Annual Growth Rate Slides to the Lowest in Five Years

Moving to the other currencies, most of them underperformed against the dollar, with the exceptions being JPY, CAD and NOK. The former gained somewhat and the other two traded nearly unchanged. The main losers were CHF, EUR and SEK in that order.

EUR/CHF — Technical Outlook

Since the first days of January, EUR/CHF keeps on forming higher lows, which shows that the bulls are trying hard not to give up and push the pair back up again. But let’s not forget that, last week, EUR/CHF tried to fly higher, but got held near the 1.1340 barrier, which failed to break and then the pair quickly got back down again. That said, it wasn’t able to create a lower low, which, in our view, means that we might see another attempt by the bulls to drive the rate higher.

As for the Rest of Today’s Events

The final German CPI for December is set to be released, and is expected to confirm its preliminary estimate, namely that inflation in Eurozone’s growth engine has slowed to +1.7% yoy from +2.3% in November.

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