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We recently wrote that the EU is treating the UK like Greece and that no matter what happens, the EU will say there has not been enough progress.

Well, there was some kind of feel-good atmosphere after Theresa May’s Florence speech. She offered a transition period, but not much more. The initial responses were warm, but did not amount to a change in the general message. Barnier and his colleagues say that more progress is needed.

UK Trade Secretary Liam Fox added fuel to the fire. He said that if there is no deal by March, the UK will have to walk away. The “no deal is better than a bad deal” is seeming more likely.

GBP/USD is already more than 300 pips off the highs, but this is more related to poor economic data and the comeback of the greenback.

So far, we are not seeing an immediate reaction to the prospects of stalled negotiations. But it can come sooner than later.

Support is found at 1.3220, followed by 1.3130. Resistance is currently at 1.3290.

More:  GBP: Set To Remain Volatile Amid 2 Opposing Forces – Barclays