- Negotiations carry on, no-deal fears grow.
- Pound gains could be capped short-term.
Time is running out for the EU and UK to make progress towards a Brexit trade deal this week. Whilst there has been some progress the main sticking points – fisheries and a commitment to a level playing field – remain. Without progress this week a no-deal is much more likely. Thursday’s EU leaders meeting could be the last chance time for agreeing a deal. That said, some reports indicate that negotiations could continue until early December if a deal appears close.
UK PM Boris Jonson is embarking on several new initiatives this week to reboot his party, after both his director of communications, Lee Cain, and his chief adviser, Dominic Cummings, left their roles unexpectedly at the end of last week. Boris Johnson will be doing this in self-isolation at No.10 after coming into contact with a Conservative MP last week who then tested positive for Covid-19.
GBP/USD as after rallying to 1.3242 in early trade, the pair has eased off the high.The Pound’s outlook is mixed and is expected to remain that way whilst talks continue. The daily chart set-up is positive over the past 7 weeks after picking up from September 23 low of 1.2670. 20-day sma crossed through the 50-day sma late last month, an additional positive boost, as the pair trades above all three simple moving averages. Support is seen at the 20-day sma, between 1.3092 and 1.3110.