The drama, confusion and sheer uncertainty over Brexit intensified on Wednesday evening, after British MPs rejected all eight options aimed at breaking the Brexit deadlock.

With none of the indicative votes gaining a majority, the options in moving forward are becoming increasingly limited, with speculation in the air of a general election down the line. While MPs plan to trim the list of options and vote again on Monday, the clock is ticking with the risk of a no-deal Brexit rising by the day. Although Theresa May has pledged to stand down by May 22 if MPs back her plan, it remains uncertain whether Commons Speaker John Bercow will allow her deal to be brought forward for the third time on Friday. If May’s deal is rejected once again and Parliament is unable to agree on anything, the UK could slip into a no-deal Brexit which will have severe consequences on the British Pound.

Sterling tumbled on Wednesday evening as Brexit uncertainty haunted investor attraction towards the currency. However, looking at Sterling’s overall price action, it does feel like the risk over a no-deal Brexit is underpriced. The year-to-date uptrend for GBPUSD is still intact despite the twist and turns. There have been higher highs and higher lows so far in 2019 with prices trading around 1.3162 as of writing. While the GBPUSD has the potential to challenge the 1.3300 resistance, further gains beyond this point are likely to be limited by Brexit developments.

Reporting for EasyKobo on Thursday , 28 March 2019 in Lagos, Nigeria

Source: Lukman Otunuga, FXTM Research Analyst