If you’re feeling confused about the current Brexit landscape, you shouldn’t feel too bad. It appears that most leading UK politicians are equally as confused. As the UK continues to lurch towards the current April 12th Brexit deadline, there have been even more twists in the tale.
Following cross-party talks last week, May announced the prospect of a compromise with the Labour party in a bid to secure their support for a deal. May was supposed to hold a fourth parliamentary vote on her Brexit deal this week. However, she has ruled out such a move citing the current lack of support.
May To Compromise on Customs Union?
Such a compromise is said to involve the potential for remaining in an indefinite customs union with the EU following the official Brexit departure date. However, May has come under fierce opposition from members of her own cabinet who have deemed such a move as a “surrender” to Jeremy Corbyn.
Boris Johson Slams Customs Union Compromise
Commenting on the issue, Boris Johnson said:
“If the UK were to commit to remaining in the customs union, it would make a total and utter nonsense of the referendum result… To agree to be non-voting members of the EU, under the surrender proposed by Jeremy Corbyn– it cannot, must not and will not happen.”
As the PM continues to fight for a Brexit deal she has asked the EU for a further extension, to June 30th. Under the current structure, the UK is due to leave the EU on April 12th unless it can secure a deal. This would then see the UK depart on May 22nd. May had initially requested June 30th, but EU leaders turned it down last month.
Tusk Suggests 12 Month “Flextension”
President of the European Council, Donald Tusk, has further muddied the waters. He suggested that the UK agree to a 12-month Brexit extension, which he coined a “flextension”.
Speaking on the back of hours of meetings last week, a senior EU official quoted Tusk as saying:
“The only reasonable way out would be a long but flexible extension…I would call it a ‘flextension’… How would it work in practice? We could give the UK a yearlong extension, automatically terminated once the Withdrawal Agreement has been accepted and ratified by the House of Commons. And even if this were not possible, the UK would still have enough time to rethink its Brexit strategy. Short extension if possible and a long one if necessary. It seems to be a good scenario for both sides, as it gives the UK all the necessary flexibility while avoiding the need to meet every few weeks to further discuss Brexit extensions.”
EU Summit Due This Week
Members of May’s own cabinet have fiercely opposed such an extension. The PM is due to hold more cross-party talks with Corbyn this week. That being said, it seems that all options are viable. EU leaders are due to meet this week for a special summit. Following the summit, May will hear if they approved her June 30th extension request.
GBPUSD continues to trade within the bullish channel. This has framed price action since last year’s lows, recently finding support at yet another test of the 1.30 level.
On the lower timeframes, you can see the bearish trend line running from March highs which offers immediate resistance for GBPUSD. Bulls will need to see a break above this level to keep bullish momentum on track or risk a break below 1.30.