The GBPUSD has soared overnight to 1.3238 on news that Prime Minister Theresa Mays is considering postponing Brexit beyond the March 29th deadline. Although Prime Minister Mays has previously insisted that the U.K. would leave on schedule, she has been unable to gather the votes needed in Parliament for a Brexit deal. Additionally, the Prime Minister will be updating Parliament after discussing extending the Brexit with the cabinet earlier today. This will be followed by a government propose motion on the Brexit state-of-play by Tuesday night. The House of Commons will then debate and vote on the Prime Minister's Brexit motion on Wednesday. This will create additional volatility in the British Pound currencies this week as news of a potential extension is released.
The daily GBPUSD chart indicates that the Stochastics is potentially overbought and is currently testing the high at 1.3217. A close above this area could signal that the GBPUSD will move higher especially since both the RSI and ADX are also indicating that momentum has potentially shifted from selling to buying. However, a retracement is also likely since the Stochastics is indicating a potential overbought status.
Additionally, the weekly chart is indicating potential overhead resistance at 1.3289. Both the RSI and ADX are indicating the momtentum is currently to the upside and the Stochastics has fallen below the overbought level at 80. With the postponement of the Brexit, the GBPUSD has the potential to move up to the previous high that was established on April 20, 2018 at 1.4376.
However, if the Brexit extension fails, then the British Pound could fall and either re-test or fall below the previous low that was formed January 4, 2019 at 1.2455.
The next significance Brexit deal vote was also rescheduled for March 12th, with a current deadline of March 29th for Brexit if an extension is not granted.