GBP/AUD has tumbled 0.30% in early trading on Tuesday, currently fluctuating at around 1.8750 as of 05:30 AM UTC.
The pair has moved within a symmetrical triangle since October 15. In technical analysis, pattern precedes a bullish rally or a steep downtrend, depending on which side of the triangle is broken. For GBP/AUD the price has just broken the lower line, anticipating a bearish trend in the coming days.
The next stop for the quotation might be between 1.8500 and 1.8600. Nevertheless, any relevant Brexit news could reverse the trend.
UK Parliament Rejects Johnson’s Election Bid
The British pound began to lose strength after the UK parliament rejected Prime Minister Boris Johnson’s bid to call a general election on December 12. This is the third time when members of the parliament (MPs) reject an election bid.
Johnson, who leads the governing Conservative Party, doesn’t have the power to hold an early election as he needs the approval of two-thirds of MPs, which means at least 434 votes. In this case, the PM has to convince the opposition to vote his bid. While 299 MPs supported the bid and only 70 voted against it, the bill failed to achieve the needed 434 votes.
The PM hopes to hold an early election in an effort to accelerate the UK’s withdrawal from the European bloc. He anticipates that the Conservatives would strengthen their position in the parliament after the election, which is not necessarily true. In the best-case scenario for Johnson, he would be able to move on with his Brexit plans by having the parliament’s support thanks to more seats won by the Conservative Party.
As of today, the opposition is too strong for the PM, with the parliament constantly rejecting his motions.
Jeremy Corbyn, leader of the opposition Labour Party, said that he couldn’t trust Johnson and wouldn’t approve a poll until the PM doesn’t definitively rule out a no-deal Brexit.
Johnson doesn’t give up his plan. Today, he will propose another motion to call for an early election.