GBP/USD is mixed as a Brexit deal is still on a knife edge ahead of the FOMC and BoE
Last week we saw the eighth round of negotiations end in disaster yet again with both parties saying talks had stalled. The main sticking point at the moment is if the UK will go back on their word over the customs territory in Northern Ireland. The Internal Market Bills is currently working its way through the House of Commons and the House of Lords. At the moment it is not clear if the bill will pass but if it does it will break international law. A deal could still be possible but this could represent a lack of trust and could impact the future of the relationship between the EU and UK.
GBP/USD: Dollar's renewed selling pressure damages the bullish outlook
Support has started to form on Cable as the dollar has seen renewed selling pressure in the early part of this week. This comes with the outlook for Cable very much in an uncertain stage. Last week’s big sell-off has seriously damaged the bullish outlook and we turned neutral on a medium term basis. The support has since begun to form around 1.2760/1.2770, but for now, is still only tentative. If this rally now fails under the resistance of overhead supply between 1.2980/1.3050 then the selling pressure could quickly resume.
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