Image source: Mykhaylo Palinchak © 123RF.com
In a historic vote for British politics yesterday, the Conservative party led by Boris Johnson won a sweeping elections victory over Jeremy Corbyn’s Labour party.
The Tories secured 364 seats in the House of Commons from a total of 650, which amounted to a gain of 47 compared to the previous cabinet. Labour won only 203 seats, down 59.
Thus, the majority victory in the General Election granted Boris Johnson with a mandate to freely implement his do-or-die approach to divorcing the UK from the EU.
The PM now has secured the necessary support in Parliament to step up his Brexit negotiations and pursue his initial vision of uncompromising politics.
Johnson would now most likely choose to take the UK out of the bloc by the 31st of January 2020 with or without a trade deal, which was his original idea.
This time, however, he would not face resistance in the House of Commons, preventing him from pushing forward for a so-called Hard Brexit by forcing him to seek another lawful extension of the deadline.
The immediate result of yesterday’s vote was the bolstering of the pound. The GBPUSD pair surged today with more than 1.45 per cent owing to the fact that some of the uncertainties around Brexit have been seemingly answered.
The longer-term uncertainties regarding the future of the British economy, however, persist.
Nevertheless, the GBPUSD seems to have neared an end of a decade-long bearish trend, which was initiated at the time of the 2007 credit crunch.
Today’s surge of the pair reached the 1.34000, which was the lower-end of a swing that resulted from 2016’s pivotal Brexit vote.
With regards to the long-term outlook for the pair, if the price manages to successfully breakout above that level, then it would be able to consolidate in a crucial range between the significant price levels of 1.41905 and 1.33600.
GBPUSD 1M Price Chart. Image source: Trendsharks ©, created with TradingView.com
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