The big Brexit breakthrough that is reported to be in the works in Brussels involves a concession on the hot topic of the Irish border. Reportedly, the sides agreed on a “regulatory alignment” between the Republic of Ireland and Northern Ireland, which is part of the UK.
A breakthrough on Brexit is good for everybody and maintaining an open border in the island of Ireland is good for trade and also for peace, keeping the Good Friday agreement.
However, not everybody likes that. The UK government depends on the Northern Irish DUP, a party that rejects any dilution in the Union of the United Kingdom. Moving the North closer to Ireland opens the door to having Northern Ireland as part of the Republic, something they are inherently against.
They have already threatened to bring down the government if the region is treated differently than the UK and they are not happy today.
In addition, the hard Brexiteers in May’s government may not like it either. However, neither foreign minister Boris Johnson nor any other of the top-ranking hardliners have spoken out so far today. We’ll surely hear something from them later on.
If this is the case, GBP/USD could find it hard to break above resistance at 1.3550 and could fall all the way down. Support awaits at 1.3420, the low of the day. This is not the end of the story.Get the 5 most predictable currency pairs