Global macro analysis for 08/01/2019

The global markets are still busy with the Brexit theme and investors are counting down the days to vote in the British parliament on the draft Brexit agreement, which is to take place next Tuesday, on January 15. After the Christmas holidays, the British deputies return to the meeting tomorrow. Prime Minister May is seeking support in Brussels for amendments to the agreement that would convince the other parliamentarians. Meanwhile in the London lobbies, it is said that more than half of May's party will probably vote against the project. This raises uncertainty around the pound, even if the government's unofficial plan is to lose in the first ballot and try again for an EU revision for the amendment to the agreement. The most of the global investors hold the view that the chances of accepting an agreement with the EU are underestimated and as a result, the pound will be higher in a month. Along the way, however, the pound will come to face the political games of the conservative Brexit and the opposition, so trading the pound will not be an easy matter. Not only GBP will benefit from the agreement, but the risk premium would come from all over Europe, and globally there would be one problem to delete from the list.

Let's now take a look at the GBP/USD technical picture at the H4 time frame. The market is trading around the technical support at the level of 1.2713 after the failure to break through the technical resistance at the level of 1.2795. The market conditions are now overbought and the momentum indicator is pointing south, so the short-term correction is on its way: the nearest technical supports are seen at the levels of 1.2647 and 1.2586.

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