UK Prime Minister Theresa May is preparing to present an alternative Brexit plan to parliament this afternoon. After her original plan was voted down last week in a historic 230 vote defeat for the government, the pressure on the beleaguered PM could not be any higher.

Over the weekend, May was involved in cross-party talks aimed at securing broad support for her Brexit plan. However, according to sources, May’s efforts were in vain, and she was unable to build a consensus among those she consulted.

May To Ditch Irish Backstop?

According to cabinet sources who spoke with British journalists last night, May briefed her cabinet from a conference call at her Chequer’s residence in the countryside to tell ministers that she would remove the “Irish backstop” plan from her Brexit deal. This comes in a bid to secure support from the DUP who have been ardently opposed to May’s plan, as well as dissenters within her own party.

The issue of the Irish backstop and the risk around the potential for a hard border being re-established with Northern Ireland has been the most contentious and hard-to-solve issue of the Brexit negotiations, and May’s reported willingness to scrap this element of the deal highlights how desperate she is at this stage.

January 29th Vote

The details of May’s proposed new plan will be put before parliament today in a neutral motion. MP’s will then have a week to mull over the new proposal before it is debated, and amendments must be made before being put to vote on January 29th. There is a great deal of speculation around how May intends to scrap the Irish backstop issue, so the market, as well as UK and European citizens, will be closely following updates later today for further details on May’s proposals.

Technical Perspective

GBP/USD is currently turning lower within the rising wedge pattern that has framed price action over 2019, pointing to the risk of a continuation of the longer-term trend lower. Local support comes in the rising trend line of the wedge formation along with structural support at the 1.2693 level.