Parliament Brexit Vote Today

Parliament Brexit Vote Today

Today, the United Kingdom's Parliament will vote on the Prime Minister's deal. What is likely going to happen?

Getty Images

It is projected that the Prime Minister's deal will be rejected.  The release of news regarding the vote will more than likely create extreme volatility in both the GBP/USD and EUR/GBP, as well as the GBP/JPY currencies.

The daily GBP/USD chart shows that price is testing an area of potential resistance and is currently forming a bearish candlestick pattern.  If the pattern holds, then the GBP/USD is likely to go down to at least test the 1.2650 area and possibly even the 1.2350 area.  Additionally, some analysts have predicted that if a deal was not reached, then the GBP/USD could see the 1.2000 area this year.Parliament Brexit Vote TodayCurrently, the EUR/GBP formed a doji yesterday and today's bar is bearish at the moment.  A test of .8840 may occur and, if that area holds, then a test of .9100 could occur. 

EURGBP Brexit VoteAlthough big moves are expected, here's the issue - with big moves come big losses unless you are trading either the binary options, call spreads or the new touch brackets.  The touch brackets are very similar to trading a mini Forex account.  There is a floor price and a ceiling price.  If going short, then the ceiling will limit risk and the floor will limit profit.  If going long, then the floor limits risk and the ceiling limits profits.  If either price is touched (floor or ceiling) then you are out of the trade. 

For example, here are the touch brackets available this morning:

GBPUSD Touch BracketsIf a trader has a bias to the long side, then he could buy the GBP/USD 1.2812 - 1.3062 at 1.2853 entry price for a risk of $41 and a maximum profit of 209.00.  If price touches 1.2812 then the trader loses $41.  If price touches 1.3062 then the trader makes a profit of $209 (excluding exchange fees).

Long Touch BracketIf the trader has a bias to the downside, then he could sell the GBP/USD 1.2662 - 1.2912 touch bracket.  If the entry price is at 1.2844, then he has a total risk of $68 with a maximum profit of $182.00.  If price reaches up and touches 1.2912 then the trader loses $68.  If price reaches down and touches 1.2662, then the trader makes $182 in profit (excluding exchange fees).

Short GBPUSD Touch BracketOf course, the trader also has the option of exiting at any time or holding until expiration if price does not touch the floor or ceiling price.

The information contained above may have been prepared by independent third parties contracted by Nadex. In addition to the disclaimer below, the material on this page is for informational and educational purposes only and should not be considered an offer or solicitation to buy or sell any financial instrument on Nadex or elsewhere. Please note, exchange fees may not be included in all examples provided. View the current Nadex fee schedule. Nadex accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representations or warranties are given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk and any trading decisions that you make are solely your responsibility. Trading on Nadex involves financial risk and may not be appropriate for all investors. Past performance is not necessarily indicative of future results. Nadex contracts are based on underlying asset classes including forex, stock index futures, commodity futures, cryptocurrencies, and economic events.

Trading can be volatile and investors risk losing their investment on any given transaction. However, the design of Nadex contracts ensures investors cannot lose more than the cost to enter the transaction. Nadex is subject to U.S. regulatory oversight by the CFTC.