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  • GBP/USD extends Friday’s pullback from May 2018 high.
  • UK dismisses calls of breakthrough in Brexit talks, Germany and France to ease “level playing field” demands.
  • Comments from UK PM Boris Johnson, EC President Ursula von der Leyen will be in the spotlight.

GBP/USD holds lower ground while easing to 1.3423, down 0.10% intraday, during the pre-London open on Monday. The Cable benefited from the US dollar weakness, as well as hopes of a soft Brexit, during the early Asian session. Though, fears of no-deal Brexit and a lack of major data/events keep the quote depressed for the second consecutive day.

Brexit drama continues…

Brexit negotiators from the European Union (EU) and the UK, Michel Barnier and David Frost respectively, failed to offer any breakthrough in the talks during the last week. The same pushed UK PM Johnson and EU Chief von der Leyen to conduct a weekend chatter. Though, nothing from the farther could deliver any progress. The key hurdles namely fisheries, level playing field and governance are still the major hurdles stopping the Brexit deal during the last hours.

On the positive side, Times came out with the news suggesting that Germany and France are up for a compromise on their demands for a so-called “level playing field” in the final Brexit trade talks offer to British PM Johnson.

Even so, fisheries are a tough nut to crack off-late as France insists on heavy power in the British waters while London doesn’t want that happen without any major benefits.

It should also be noted that the Internal Market Bill (IMB) will also be discussed in the UK’s parliament and will be the key issue as the EU has clearly warned against the same.

Hence, Monday evening’s comments from the UK PM Johnson and EU Chief von der Leyen will be the key to watch for the GBP/USD traders.

Other than the Brexit and IMB issues, US stimulus headlines and virus updates, not to forget the US-China tussle, will be the key. Recently, the Trump administration showed readiness to levy fresh sanctions on Chinese policymakers, per Reuters, whereas Russia showed readiness to roll out the vaccine.

Amid these plays, coupled with a light calendar, risks consolidate the recent gains while waiting for the key catalysts.

Technical analysis

Sustained trading beyond May 10, 2018 high near 1.3615 can eye for March 2018 bottom surrounding 1.3810. However, Overbought RSI, Brexit uncertainties can trigger fresh pullback from the multi-year top towards 10-day SMA near 1.3370, followed by an ascending trend line from November 13 around 1.3315.’