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GBP could be in trouble with fresh Brexit crisis


GBP has been cooling in the session of Thursday, after a storming run higher this week versus JPY, then printing two and a half month highs versus USD.


There could be a crisis with Brexit talks tomorrow (Friday), which would be serious problems for GBP and here is why...


Markets have been pricing in some sort of deal between Britain and the EU, as shown with the GBP bulls pumping up the price. It appears a complete disregard for the risks still of no progress or a deal not getting done are being considered anymore.

It puts much risk on the pound, as if there is a lack of positive update, or another week without any deal, the bears will be waiting. A level of exhaustion can somewhat be witnessed in the current price action being observed. It is vulnerable to any setback in the news flow concerning negotiations, which could well happen given negotiations are fast running out of time before the transition period ends.


Latest reports note: Mr Barnier was expected in London this evening ahead of talks with Boris Johnson’s chief negotiator David Frost on Friday, with just 34 days to go to the deadline for a deal. But reports suggest that he has told Lord Frost that he will pull out of this weekend’s talks unless there is a major shift in negotiating stance from the UK. And today, Mr Johnson’s official spokesman was unable to say whether the discussions would go ahead.


Technical


Both GBP/JPY and GBP/USD have run into supply areas for now (for more specific trade ideas and analysis check out our membership)



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