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No-deal Brexit Looms Over Disagreements in Withdrawal Agreement

The British Pound continues to remain under pressure as the EU member states have indicate their regrets on non-provision of an alternative proposals to replace the problematic Irish backstop in the Withdrawal Agreement.

Reuters has cited a leaked response to UK Prime Minister Boris Johnson’s letter, with the document also stating that both parties agree that the only way to prevent returning a hard border on the Ireland was to stick to the backstop as the only legally operative solution.

This position was re-echoed by the EU’s Brexit Coordinator Guy Verhofstadt, who stated in a recent tweet: “I don’t see any majority in the European parliament to remove the backstop from the Withdrawal Agreement…it is a vital insurance policy, negotiated in good faith & supported by the people of the Island of Ireland.”

The British pound is currently trading against the US Dollar at 1.2085, with the formation of a hammer candle below the border of the ascending support trendline which was breached by the downside movement to the 1.2065 S2 pivot level.

If the pullback hammer closes below the broken ascending support line, the downside door to 1.2065 and 1.2027 (August 9 low) would have been opened. Close of price above the central pivot of 1.2133 invalidates this move, and rather opens the door for more upside to 1.2163 and possibly 1.2201 (August 6 high).