The Mess Of UK Politics Keeps GBP Anxious
Skerdian Meta • 2 min read
Last month British PM May decided to take her chances and call for snap general elections with the hope that the Conservatives (Tories) would succeed in increasing their seats in the parliament. That would give May a firm hand when dealing with the EU on the Brexit process.
I don’t know where she got that idea from, because she´s been getting increasingly arrogant on this matter; she´s been pursuing a hard line on Brexit and I don´t think the British public likes that. Actually, I don´t think that the Brits voted for a hard Brexit.
So, it wasn´t that big of a surprise that the Tories lost the majority in the parliament. 226 places is the majority in the British Parliament and the Tories, previously, had 330 seats. Now they have just 318 seats, so they have to team up with another party to gain a majority. They seem to be joining up with the Democratic Unionist Party (DUP) of Northern Ireland.
It´s going to be a rough marriage between them because one of the main goals for the DUP is the border between Northern Ireland which is part of the UK and the Republic of Ireland, which is part of the EU. They want to keep the border as soft as possible for the Irish of both sides, but Theresa May wants a hard Brexit.
So, it´s going to be an abusive relationship and the forex market doesn´t like such relationships. They are unstable and the threat of a breakup is real.
UK conservative leaders are on the wires today and they sound even more arrogant, so I don´t know how this will work between them. But I know that all this is negative for the Pound, and GBP/USD has been sliding this morning, after consolidating on Friday.
If we get a good pullback, we will try to open a long-term sell forex signal. 1.28 seems like a good enough place for shorts, because it used to be a strong support area. But, we will heck the price action when we get there.