The British Pound has been higher this week in response to more positive headlines around the ongoing Brexit trade talks. Following a tense few weeks of speculation that the UK and EU would fail to agree a deal in time for the 15th October deadline announced by Boris Johnson it now looks as though trade talks are in better health.

The EU’s chief negotiator Michel Barnier has confirmed that the EU will drop a range of demands along a broad swathe of issues in order to bolster the chances of the two sides signing a deal.

Clashes Over Internal Market Bill

Over recent days, the two sides had clashed over the contents of the UK’s Internal market Bill. On Monday, the European Commission VP Maros Sefcovic had called on the UK to remove aspects of the bill which would essentially see the UK disregarding elements of the initially agreed withdrawal agreement between the UK and EU, threatening legal action otherwise.

Despite these threats, the UK Cabinet Office Minister Michael Gove said that the UK intends to press ahead with passing the bill, which is due to go into report stage in the House of Commons today.

However, away from the conflict over the Internal Market Bill, there are signs that the two sides of moving closer towards a deal. Negotiations on key issues such as EU access to UK fishing waters as well as the EU’s level playing field requests are due to be extended to allow more time for negotiation.

Progress Being Made As Talks Continue

Speaking with a Brussels think-tank this week, EU council President Charles Michel said that progress had been made in the talks, saying: “Sentiments about the prospects of reaching a Brexit deal have veered wildly.The reality is a bit less excitable and a bit less predictable. The Brexit talks have been making steady, if unspectacular, progress.

The ninth round of face to face trade talks will get underway this week and markets will be keenly awaiting further updates as we continue to head towards the 15th October deadline. Attention will also be on the Internal Market Bill and the reception it gets in the Commons today.

Technical Views

EURGBP (Bearish below .9097)

From a technical viewpoint. EURGBP continues to move higher within the broad bullish channel which has framed price action over recent months. However, price has recently dipped back below the .9097 level. While below here we could see a further test of the channel low ahead of deeper support at the .8861 level.

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 76% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.