Theresa May has had a pretty difficult time as Prime Minister of the UK, but no one said that job was going to be easy. She applied for it herself at the most difficult time when the British public voted to leave the European Union and Theresa May was a remainer, not a leaver, which made the job of Prime Minister even more difficult.

In recent months we have heard many rumours surrounding a vote of no confidence in the British Parliament for her, but that vote never came from the opposition Labour Party or the governing partner, the DUP party. Although, now we get a leadership call from her own Party. Conservative MPs rounded up all the votes to ask for such a vote in the the Tory Party which will take place this afternoon.

But, the voices supporting her leadership increased as the day rolled on and the Tory MPs who seemed like they were against Theresa May all this time, have now rallied up behind her to support their leader. We got confirmation that 153 Conservative lawmakers were on her side, but rumours said that she got the 158 votes needed to remain the leader of the Conservative Party and the GBP rallied around 150 pips higher on those rumours.

The European Session

• Graham Brady Confirms Leadership Vote – The head of the 1922 Committee in the Conservative Party in the UK confirmed this morning that the threshold for a vote of leadership was reached as 15% of Tory MPs agreed on it.
• I Will Contest the Vote With Everything I Got, Says May – Theresa May spoke after the leadership challenge saying that she has served in the best interest of the Party and the nation. She will fight it back and push for a deal with the EU.
• Italian Q3 Unemployment Rate – The unemployment rate for Q3 was expected to decline to 10.3% from 10.7% previously. Although, it declined further to 10.2% – this still is pretty high for a developed nation.
• Eurozone October Industrial Production – The industrial production was expected to increase by 0.1% in October, but it ticked higher by 0.2%. Although, last month’s number which was negative was revised even lower to -0.6% from -0.3%.
• EU Unlikely to Offer Legal Assurance on the Irish Backstop – Theresa May flew to Brussels yesterday to get assurance on the backstop issue. But, sources from the EU say today that the EU has yet to discuss on how to give the UK assurances over how the Brexit backstop will be used. So, it has to come after Christmas then. EU’s Tusk added that they will discuss a no-deal Brexit scenario in the last EU summit for the year, so it seems that the EU is preparing for that.
• Italian Budget Drama – EU’s Moscovici said early this morning that the Italian situation regarding budget is not the same as France because Italy has violated rules many times. Then there were rumours saying that Italian deputy PM Salvini was going to resign but he denied those rumours. Reuters and Bloomberg posted articles where apparently the Italian Prime Minister Conte left for Brussels with a deficit target of around 2.0%. I suppose he has convinced Di Maio and Salvini to lower their targets then.
• May Rallies Her Supporters Behind – We got confirmation earlier that 153 Conservative lawmakers would back Theresa May on the leadership vote this afternoon. Although rumours now are suggesting that she has passed the threshold of 158 votes needed to remain as the Tory leader.

The US Session

• Challenging Relationship with China for Pompeo – The US Secretary of State Mike Pompeo said earlier on Fox News that China is performng espionage and cyber attacks against the US. But he had good comments on trade and he thinks that in the coming weeks we will hear good news.
• US CPI – The US consumer price index (CPI) remained unchanged in October at 0.0%. But, the annualized number inflation number declined to 2.2% from 2.5% previously which sent the USD around 30 pips lower. It is still sliding at this moment.
• US Core CPI – The core CPI number came at 0.2% against 0.1% expected. The annualized core inflation number remained at 2.2% as previously. Average weekly earnings came lower at 0.5% from 0.8% in the previous month, while hourly earnings increased from 0.3% to 0.6%.
• Canadian Capacity Utilization Rate –  The utilization rate was expected at 85.8% but declined to 82.6%. This is supposed to be a good thing since it means that mote manpower is required for the labour, so the unemployment might fall in the coming months.

Trades in Sight

Bearish EUR/USD

1. The trend has been bearish this week
2. The retrace higher looks exhausted on the H1 chart
3. The 100 SMA is providing resistance

The 100 SMA has already turned into resistance

We opened a sell forex signal in EUR/USD a while ago as this pair jumped 20 pips higher after the softer Year-on-year CPI inflation  number from the US. The trend has been bearish this week and the moving averages are providing resistance, the 100 SMA (red) in particular. Although the core annualized CPI number remained unchanged while core CPI for October increased by 0.2%, more than expected, so the move on that inflation report should be over soon.

In Conclusion

The GBP has surged nearly 200 pips on the day and it continues to climb as the support for Theresa May grows. But, this should be a good chance to look for a long term sell forex signal since Brexit is still where it was this morning, nothing has changed and it seems like the UK might crash out of the EU. So, get your guns ready guys.