The following is EU membership court ruling outcome and its effect on GBPUSD from technical analysis perspective. See what to look out for and expect from GBPUSD.
24 January, AtoZForex – The United Kingdom’s High Court has announced their decision regarding the government’s right to bypass the Parliament and trigger Article 50 of Lisbon Treaty to initiate Brexit.
EU membership court ruling outcome
Based on the majority’s vote 8-3, the Supreme Court rules that the government must consult Parliament to trigger Article 50. The dissenting judges believe that the 1972 Act renders the domestic effect of EU law conditional on EU treaties.
A spokesperson for Jeremy Corbyn MP, Leader of the Labour Party, said:
“Labour respects the result of the referendum and the will of the British people and will not frustrate the process for invoking Article 50. However, Labour will seek to amend the Article 50 Bill to prevent the Conservatives using Brexit to turn Britain into a bargain basement tax haven off the coast of Europe. Labour will seek to build in the principles of full, tariff-free access to the single market and maintenance of workers’ rights and social and environmental protections. Labour is demanding a plan from the Government to ensure it is accountable to Parliament throughout the negotiations and a meaningful vote to ensure the final deal is given Parliamentary approval.”
Furthermore, Government ministers will not have to consult devolved nations. Thus Scotland, Wales and Northern Ireland will not have a vote in triggering Article 50. Commenting on the EU membership court ruling, XTB UK market analyst, David Cheetham stated:
“The pound has come under some selling pressure in the wake of the Supreme Court ruling, largely due to the fact that the government doesn’t have to consult the Scottish, Welsh or Northern Irish assemblies before triggering Article 50. The appeal itself was rejected, but it still remains likely that Mrs. May will meet her self-imposed deadline of beginning the formal Brexit process by the end of March. Sterling has been volatile over the announcement, with initial moves back above 1.25 against the dollar quickly fading and the market trading down to its lowest level of the day.”
UK court ruling effect on GBPUSD technical analysis
From GBPUSD technical analysis perspective, the bullish correction remains strong from an hourly perspective. However, the pair has approached a strong daily resistance level at 1.253 and being top-heave bearish continuation back into the rage would be likely.
Therefore, bulls might still dominate hourly time-frame. But as the momentum fades, bears from daily timeframe will take over. Our subsequent resistance levels are at 1.253 and 1.258. While nearby support levels fall on 1.241 and 1.228.
What is your GBPUSD technical analysis post EU membership court ruling? Share your view in the comments section below.