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Oct 12 - 02:36 PM
GBP/USD - COMMENT-GBP/USD Gains Fading As Brexit Deal Remains Elusive
First appeared on eFXplus on Oct 12 - 10:35 AM

GBP/USD has gained 1.2 percent so far this month on optimism over Brexit talks, but caution has set in amid a lack of a concrete progress ahead of next week's EU summit. Traders appear to be trimming GBP longs ahead of the weekend, while the upper 30-day Bolli at 1.3282 and September 20 high 1.3295 provide firm resistance. Irish Foreign Minister Coveney probably didn't help sterling when he said that optimism on a Brexit deal is "probably not well founded" and people should be realistic about time frames nL8N1WS3MR.
Additionally, Buzzfeed reported UK cabinet ministers have discussed the possibility of extending the Brexit implementation period by six months to avoid backstop.
Comments from UK Brexit Minister Raab, also on Buzzfeed nL8N1WS3Q2, that he couldn't endorse a deal without a set limit on membership of a customs union add to the cautious tone.
These developments highlight headwinds for PM May within her government and at the negotiating table with the EU.
A failure to resolve the Irish border issue threatens to bring down May's government, which may put a second referendum on the table nL8N1WR26B, the hint of which threatens recent positive Brexit deal and GBP/USD sentiment.

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Source:
Thomson Reuters IFR Markets

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