Sterling surges ahead of Brexit vote

Pound surges as May seeks to hold off rebellion a little longer

This was meant to be the day to watch this week, as MPs head back to Parliament to have a “meaningful vote” on Theresa May’s deal and put forward any amendments.

Unfortunately, May had other plans this week and not only cancelled the vote on her deal before the week even got underway, but also pre-empted the rebellion on Tuesday by proposing a vote on no-deal and an extension on 13 and 14 March, coincidentally – I’m sure – the same time that others were proposing forcing through an extension request with Brussels.

As ever in the world of politics, this is nothing more than a game of strategy, with the Prime Minister doing whatever it takes to cling onto her deal and position long enough to see it over the line, whatever it takes in the interim. For now it would appear she is succeeding and the latest move may not only have kept MPs at bay for a couple more weeks but also given a lift to the markets.

What’s not to like? The opposition Labour Party has been forced into backing a second referendum out of fear of losing more MPs to the newly formed Independent Group – revitalising an option that potentially opens the door to remaining in the EU – and May has put a major obstacle in the way of no deal, great news for the pound which fears that option more than anything else.

Aussie retreats as construction falters

Still, it remained below 1.33 against the dollar, the upper end of a range it’s held since the middle of last year and one that may only be broken when a significant step forward is achieved or no-deal is taken off the table altogether.

GBPUSD Daily Chart

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Gold consolidates but looks potentially vulnerable near-term

There isn’t much new to report on gold, which has been stuck in consolidation over the last few days and is showing little sign of sparking back to lift. The yellow metal is potentially looking a little overbought at this point, with the dips clearly not being bought as convincingly, dollar softness not spurring it on and the momentum indicators showing weakness.

Gold Daily Chart

This near-term outlook could therefore be a little more bearish, with $1,320 being the next level of support and $1,300 below that.

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.