GBP/AUD rose during the weekend and continues its short-term uptrend. The pair has gained 0.22% since the start of the Monday session, currently trading at 1.8817 as of 05:20 AM UTC.
The price has moved within a horizontal channel since October 17, which resembles a symmetrical triangle, if a few highs that broke its resistance line are ignored. In technical analysis, a symmetrical triangle precedes a rally or a short-term crash, depending on whether the price breaks the upper line or the lower one.
However, fundamentals are even more critical now as the Brexit saga is about to reach its culmination soon.
The pound benefits from the fact that a no-deal Brexit is less probable. Although the UK still cannot decide how it should withdraw from the European bloc.
UK Prime Minister Boris Johnson reached an agreement on October 17, but the parliament has been hesitant since then. MPs finally endorsed it in a vote last Tuesday. But they refused to approve Johnson’s timetable that would meet the current Brexit deadline set for October 31.
The PM was forced to request an extension from the EU. Extension which he openly despises, as he had pledged to handle the massive Brexit task by next Thursday. Given the parliament’s hurdles, Johnson wants a national election on the matter. But he still needs the MPs’ approval for this. The parliament will put the election to the vote today.
Elsewhere, the European leaders are ready to grant another three-month extension. Last Friday, ambassadors of the 27 EU countries met in Brussels to decide the delay. While they didn’t set any date, they confirmed that the bloc would agree with an extension.
The EU is due to meet today to decide the extension date. A leaked draft seen by the media shows that the European leaders are ready to move the deadline to January 31, 2020. Also, the UK will have the option earlier if the deal is ratified by the parliament’s chambers.
GBP/AUD might become more volatile after the parliament’s vote for or against an election.