The GBPUSD saw a major upmove last week as the markets and business saw a serious possibility that the end of the Brexit saga was now in sight.
However, these hopes were seriously dented by the postponement of voting on the new deal on Saturday which forced the government to apply for a further extension from the EU (which is rumoured to have already been agreed until February 2021).
But the GBP suffered only a slight fall back in the Far East this morning to just below 1.29.
Today, Monday 21.10. is likely to be a major event with the UK parliament starting its handling of the Withdrawal Agreement Bill which deals with the actual implementation of the divorce deal if it is agreed.
With the possibility of a delay in the Brexit deadline it is possible that the opposition will have greater confidence in pushing for its own amendments on worker's rights, etc, even if it drags on for several days.
According to the Leader of the House, the UK government will also again try today to secure a "meaningful" vote on the deal itself, which was postponed last Saturday. This depends on whether the House Speaker John Bercow allows it. The opposition claim it would be against normal practices to allow a debate on the same issue twice without some substantial change.
The government is adamant that it has sufficient numbers now to get the deal approved and still meet the original 31.10 deadline. But the mathematics still show that the voting will be extremely close and it is really impossible to predict which way it will go, if there is a vote on the deal at all today.
The dilemma here for traders, if they are not already in a position, is that the market may well react violently in either direction depending on these outcomes. If the deal is agreed without additions, then Brexit is all but finalised, But if it fails, or is agreed subject to ratification via a public referendum, then we are plunged back into a scenario facing a general election, and/or referendums on either the new deal or even whether to leave or not.
Technically we are looking very positive and are approaching the weekly 200-period SMA at around 1.3145 having already passed above and retested the daily 200 SMA at 1.2712