GBP / USD: Brexit prospects are foggy, pound sterling awaits for a denouement

On the eve of the House of Commons, a bill was approved by a margin of one vote aimed at avoiding the withdrawal of the United Kingdom from the European Union without an agreement and obliging London to ask Brussels for a postponement of Brexit. Now, the document will be submitted to the House of Lords.

It is noteworthy that the head of the European Commission, Jean-Claude Juncker warned on Wednesday that April 12 is the deadline for the approval of the "divorce" agreement by the House of Commons. If this does not happen, then Brexit will no longer have a short delay.

At the same time, the EC Chairman stressed that if the deal is approved by the British parliamentarians then Brussels will be able to postpone Day X to 22 May.

Meanwhile, the impasse in which the "divorce" process once again came out has forced the British Prime Minister Teresa May to sit at the negotiating table with the leader of the opposition Labor Party, Jeremy Corbin. It is assumed that by the end of the week they can work out some general strategy regarding the country's withdrawal from the EU.

Thus, different options for further actions are at the disposal of Theresa May today.

First, it is "extraordinary", such as early parliamentary elections, which will only intensify the split in the British establishment. However, this will not change anything in essence or a second referendum.

Secondly, the "workers" that is to have a negotiation with Jeremy Corbin and finally push his deal through the House of Commons next week.

For the sake of being able to find a way out of the stalemate with Brexit, It is possible that London will decide to surprise everyone and take part in the elections to the European Parliament scheduled for May 23. Such a decision may give Foggy Albion a chance to get an additional postponement of the Brexit deadline or else completely remove from the agenda the question of leaving the country from the EU.

In this case, the United Kingdom will have to nominate its candidates for MEPs until April 24. As it turned out recently, the British government laid such an opportunity in the budget where the sum of 829 thousand pounds was reserved last year for the state election commission.

According to experts, a clear reflection of the situation in the UK is the foreign exchange market, where it has been a storm for the sterling pound for a month already. Quotes then break through the key levels and then come back. This is probably due to the fact that even the major players cannot decide on the action plan since the prospects for the development of events are unclear.

While some analysts expect Brexit to be canceled since London will not dare to incur significant costs and risks associated with leaving the EU without an agreement (and this will be a positive scenario for the pound), others rely on the worst option in which the GBP / USD pair will first fall to the medium-term support of 1.25 and then drop to multi-year lows below 1.2.

The material has been provided by InstaForex Company - www.instaforex.com