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  • GBP/USD witnessed some fresh selling amid increasing chances of a no-deal Brexit.
  • UK PM Johnson had warned about the possibility that UK-UE trade talks would fail.
  • von der Leyen told that she has low expectations that a Brexit deal can be reached.

The GBP/USD pair retreated around 100 pips during the early European session and dropped to over three-week lows, around the 1.3225-20 region in the last hour.

The pair failed to capitalize on its attempted recovery, instead met with some fresh supply near the 1.3325 region and drifted into the negative territory for the second consecutive session on Friday. The latest leg of a sudden fall over the past hour or so was led by not so optimistic Brexit-related headlines.

The European Commission president Ursula von der Leyen reportedly told EU leaders that she has low expectations that the EU can reach a Brexit deal with the UK. This comes a day after the UK Prime Minister Boris Johnson warned that there was a strong possibility that the UK and the EU would fail to strike a deal.

This, in turn, further dampened prospects for a post-Brexit trade deal, which was seen as a key factor that took its toll on the British pound. It is worth recalling that a key von der Leyen-Johnson summit earlier this week ended with no apparent progress and officials cited that both sides remain far apart on key issues.

With the latest leg down, the GBP/USD pair now seems to have confirmed a fresh breakdown and seems vulnerable to slide further. That said, bearish traders might refrain from placing aggressive bets, rather wait for the outcome of the post-Brexit trade talks. Negotiators still have time until the end of the week to hammer out a compromise deal.

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