The GBP/USD fell sharply on Monday as hopes of a weekend Brexit trade talks deal dissipated into thin air.
EU’s Chief Brexit Negotiator Michel Barnier left London with his team over the weekend with no deal in place. Barnier threw more fuel into the no-deal Brexit fire by declaring on Monday that negotiations would not proceed beyond Wednesday.
Barnier’s comments were made in a briefing of the European Parliament members on Monday, as reported by RTE Europe Editor Tonny Connelly. Barnier also warned that EU member states would not approve a deal if the UK Parliament proceeds to pass the controversial Internal Markets Bill into law.
The proposed Internal Market Bill is said by legal experts to violate sections of the Brexit Withdrawal Agreement. It is due for consideration before the UK Parliament this Monday.
The GBP/USD is down 1.2% at the time of writing.
Technical Outlook for GBP/USD
Today’s slump follows the shooting star formation at the height of 2020’s price action for the GBP/USD. Sellers took out 1.33193, bring up support at 1.31754 (31 July and 6 August highs). A breakdown of this price level opens the door towards a further decline to 1.30554 (25 August low).
On the flip side, a recovery bounce off 1.31754 allows the pair to retest 1.33193, with a successful advance pushing the GBPUSD towards 1.34765 and possibly the v2020 highs beyond 1.35134.
GBP/USD Daily Chart
