pound-sterling-gbp-coin - GBP
  • Brexit negotiations continue ahead of the European Council meeting.
  • GBP/USD holds 1.2900 as markets assume a deal will be agreed

UK PM Boris Johnson and EC President Ursula von der Leyen spoke over the weekend in an attempt to inject momentum into negotiations. UK PM Johnson said he wants a deal, but the UK could still prosper without a trade deal. Regular communication between the two leaders is expected going forwards.

The British government reiterated the need for progress before October 15 The European Council meeting on October 15-16 will assess what progress has been made. If sufficient progress has been made then negotiators will have until early-November to get the deal done.

Brexit optimism is priced-into the Pound as noted by Goldman Sachs. The investment bank said that while a breakdown of talks is still possible, the baseline view is that a basic EU/UK trade deal will be agreed by early November.

GBP/USD holds 1.2900 however, there are several points of resistance that need to be broken through  up to 1.3008 to before the bearish trend is negated. Immediate support is at the 20-dma 1.2860. Further gains could be favoured.