It was already a terrible trading week for the British Pound thanks to the political risk circus in Westminster and Brexit related uncertainty.
Recent reports of cross-party talks between the Conservative and Labour party concluding without a deal has compounded to the Pounds woes today. With the failure of cross-party talks and Theresa Mays impending departure fueling concerns over the UK potentially crashing out the EU without a deal in October, Pound weakness is likely to remain a dominant theme.
In regards to the technical picture, the GBPUSD is bearish on the daily and weekly charts. The currency pair extended losses on the negative news this morning with prices trading around 1.2750 as of writing. A weekly close below 1.2820 has the potential to open a path towards 1.2700 and 1.2620, respectively.
EURGBP jumps to fresh 3 month high
Pound weakness has propelled the EURGBP to a fresh 3 month high above 0.8750 as of writing. The currency pair is bullish on the daily charts as there have been consistently higher highs and higher lows. A solid daily close above 0.8750 is seen opening the gates towards 0.8800 in the short to medium term.
GBPJPY sinks deeper into the abyss
The GBPJPY has tumbled almost 100 pips today thanks to the Brexit uncertainty with prices trading marginally below 140.00 as of writing. An appreciating Yen also played a role in the GBPJPY downside, given how risk aversion is boosting appetite for safe-haven assets. A solid weekly close below 140.00 should signal a move lower towards levels not seen since January 2019 at 138.00.
GBPAUD offers muted reaction
The GBPAUD offered a fairly muted reaction to news that cross-party Brexit talks have ended without an agreement. This could be based around the fact that the Australian Dollar also remains under pressure due to fundamentals at home. Looking at the technical picture, bears need to secure a solid breakdown below 1.8500 to encourage a move towards 1.8300 in the medium term. Should 1.8500 prove to be a stubborn support, the GBPAUD could rebound back towards the upper range at 1.8650.
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