The EU-UK Brexit Delay Spat Begins

HotForex Market Review
HotForex Market Review

Comments by opposition leader Jeremy Corbyn, hinting that a referendum could take place while also supporting the case of an election, coupled with Juncker’s statement that he warned May against extension beyond May 23 appear to be fanning the flames on May’s already fragile position.

The overall sentiment is that the EU is hardening its stance against the UK, as the latter finds itself appearing like a student trying to justify handing in a late assignment, given that the EU does not trust Theresa May to give her support to a credible process to allow parliament to find an alternative deal. This would mean that the EU would make May 22 the definitive UK exit day, with no further extensions at that point.

After the comments were made, EURGBP rose by more than 110 pips, however regaining half of the losses in the next candle. Still, the currency is trading away from its nearest Support level at 0.86, which is also the Fib. 61.8% level. While also far from the 0.8675 (Fib. 100%) level, if negative news continue, along with the never-ending discussions at the UK Parliament, the future of Sterling is likely to abide with the bullish signals issued by both the Stochastics and the MACD indicator.

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