Is the Market Losing Interest in Brexit?

Is the Market Losing Interest in Brexit?

The UK Supreme Court ruled that Prime Minister Boris Johnson’s prorogation of Parliament lacked reasonable justification, briefly strengthening the Pound Sterling (GBP). However, this rally was short-lived as persistent Brexit uncertainty continued to weigh on the currency. Johnson has resisted calls to request an extension to the Brexit deadline, referring to it as the “surrender act,” further fueling market unease.

Hann-Ju Ho, an economist at Lloyds Bank, noted, “While the pound was initially lifted by the Supreme Court ruling, it has settled lower again on market perceptions that uncertainties about outcomes remain high and all possibilities are still on the table.”

Technical Analysis:

GBP/USD Hourly Chart: The pair surged to 1.24984 following the court’s decision but quickly retreated, hitting a low of 1.23442 on September 25th.

Key Levels:

• Support: A break below 1.2300 could see the Pound drop further to test the 1.2230 level.
• Resistance: Any recovery will face resistance near 1.2400, with momentum capped by lingering Brexit concerns.

Outlook:

The October 31st Brexit deadline looms, with little clarity on whether a deal, no deal, or extension will materialize. While the Supreme Court ruling temporarily uplifted the GBP, the lack of resolution and heightened uncertainty have dampened bullish sentiment. The GBP/USD pair remains vulnerable to further downside risks, particularly if no clear direction emerges in the coming weeks.

Investors are closely watching developments, but market fatigue with the ongoing Brexit drama could keep the Pound under pressure in the short term.