Global macro overview for 16/01/2019

During the evening vote on the current version of the Brexit agreement, Theresa May has suffered a devastating defeat. Only 202 parliamentarians voted for her planned divorce with the European Union, 432 were against.

Shortly after the results, May gave a speech to the politicians gathered in the House of Commons suggesting that the government would accept their decision. In her opinion, the result does not represent what really supports the government, and the prime minister appealed to respect the results of the referendum from two years ago. Nevertheless, the vote of confidence for May is at stake now. If the Prime Minister manages to maintain his office, he will start talks with representatives of the opposition, and the official position is to be published on Monday, next week.

The three amendments to the current Brexit agreement notified at the last minute were rejected before the main vote. The most important of them, concerning the Irish border and the so-called "backstop" found support only among 24 voters, 600 were against.

Let's now take a look at the GBP/USD technical picture at the H4 time frame. The market jumped just before the voting news has hit the newswires and the price rallied to the level of 1.2881, but did not manage to break out above this level and no new high was made (the old swing high is still seen at the level of 1.2928). Currently, the market is consolidating the gains after the typical behavior of investors called "buy the rumor, sell the news", so it is locked in the intraday range between the levels of 1.2824 (support) and 1.2882 (resistance).

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