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The pound could not break high resistance and dropped to lower ground on Monday’s failure to reach a Brexit breakthrough. The What’s next? Here is the view from Barclays.

Here is their view, courtesy of eFXnews:

Barclays Capital FX Strategy Research discusses GBP outlook in the near-term, and thinks that  investors should consider fading the current priced extreme optimism on the Brexit deal front.

“While a progression to trade talks is our base case, significant uncertainty remains regarding the Irish border issue, given reported (BBC) demands that Northern Ireland not receive “special status” from the Conservatives’ coalition partner, the Democratic Unionist Party (DUP),” Barclays argues.

In the context of extreme Brexit optimism and complacent FX markets, we recommend selling GBPJPY* this week,” Barclays advises.

In line with this view,  Barclays recommends being short GBP/JPY* from 151.12 targeting 147.35 as its trade of this week.

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