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  • GBP/USD remains on the back foot, fails to hold onto the previous day’s gains.
  • The UK seeks to avoid Irish Sea checks on goods, employers urged UK PM Johnson.
  • The EU leaders push for “level playing field” but stay divided.
  • Coronavirus, UK-US trade deal also weigh on the pair.

GBP/USD declines 0.20% t 1.2940 while heading into the London open on Monday. In doing so, the pair fails to hold onto Friday’s gains amid worries concerning Brexit deal between the EU and the UK. Also contributing to the pair’s weakness could be the US dollar’s recovery.

In addition to the UK PM Boris Johnson’s push to the EU over fisheries, The Times came out with the news that British diplomats are secretly preparing to evade goods’ checks at the Northern Ireland Sea. Also likely to harden the post-Brexit trade deal talks is the push by the UK employers to not sacrifice British services for a trade deal with the EU.

On the other hand, the EU has its own demand and holds secrets of the “level playing field” while using broad threats and turning down the UK wishes as and when possible.

Elsewhere, the UK PM Johnson is also likely to push for the US trade deal by March 02, as per The Telegraph. However, the Independent spread the news that the Tory government has been warned by the US to not sidestep the greed checks on goods in the Irish Sea to avoid the end of any hopes of the US-UK trade deal.

Furthering the downside pressure on the pair is the USD recovery amid broad risk-off led by the coronavirus fears. The deadly virus has been spreading outside China and triggered strengthened the greenback, due to its safe-haven appeal, since the day’s start.

An absence of UK data will keep Brexit headlines in the spotlight as British ministers are to sign the initial proposal by Tuesday. On the other hand, the second-tier activity numbers from the US Dallas Fed and the US Chicago Fed will be the keys to watch.

Technical Analysis

A downward sloping trend line since February 03, at 1.2995, will challenge buyers beyond a 100-day SMA level of 1.2960. Alternatively, 50% Fibonacci retracement of October-December 2019 upside, at 1.2854, can act as the immediate support.