According to “The Spectator”, Brexit talks are on the verge to collapse. The magazine cited an unnamed source close to the government of UK PM Johnson which stated that pessimism is high and that preparations for a collapse of negotiation are being made. The source blamed Irish PM Leo Varadkar for failing to make concessions on the Irish border issues after UK Parliament took a no deal Brexit off the table. The source stated “Those who pushed the Benn Act intended to sabotage a deal and they’ve probably succeeded. So the main effect of it will probably be to help us win an election by uniting the leave vote and then a no deal Brexit. History is full of such ironies and tragedies.”
EU Has Hardened Position
According to officials familiar with discussion, the EU has hardened its position over the weekend. It appears that Brussels believes it has the upper hand as the clock is ticking down which will force PM Johnson to ask for an extension. This is something he has refused as he stated the UK will leave on October 31st,with or without a deal despite Parliament passing a law which will force him to do just that. As Johnson stated after the law was passed, it gives the EU no reason to negotiate which is exactly what the EU is now doing.
The Director of the British Chambers of Commerce, General Adam Marshall, noted that more no-deal preparation is required. He further noted “It’s good that government has got its shoulder to the wheel. But it’s going to have to push a lot harder to give businesses answers to the many complex and detailed questions they have.” The Republic of Ireland has set aside $1.3 billion for a no-deal outcome. Finance Minister Paschal Donohoe added “A No Deal is unpredictable and different sectors could be impacted in different ways.” The Irish border remains the key hurdle in securing a deal.
Will Hungary Save Brexit?
Rumors have flared up that PM Johnson is seeking an EU ally to veto a Brexit extension which he may have to ask for if no deal will be reached by next week. That way Johnson’s cabinet will be in compliance with the law and there wont be a Brexit extension. This means that the UK will leave on October 31st 2019 as PM Johnson has promised. The most likely candidate to break EU unity is Hungary, but other countries such as Poland, Sweden or Slovenia shouldn’t be ruled out either. The drama will continue to play out over the next few week’s, but it appears that PM Johnson may have an ace up his sleeve.
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Brexit Deal Chances Are Slim
As both sides continue their negotiations today, the chances of a deal by next week’s EU summit are slim. PM Johnson has a roughly 30 minute phone call with German Chancellor Merkel where he made it clear that if the EU demands that Northern Ireland remains inside the EU customs union, a deal is “essentially impossible.” The latest UK proposal in order to solve the border issue have been all but rejected by the EU. European Commission President Jean-Claude Juncker stated that a no-deal Brexit would mean a hard border in Ireland.
James Slack, spokesman for PM Johnson pointed out that the EU needs to compromise in order to achieve a deal. He added “We are only going to be able to achieve that if the EU works with us and compromises. The prime minister’s position is a clear one: the U.K. needs to leave the EU in its entirety and it’s not acceptable for Northern Ireland to be left behind in the customs union.” The DUP, which props up the Johnson government, will not support a Brexit deal which treats Northern Ireland different than the rest of the UK.
A no deal Brexit will not threaten the oil supply of the UK according to a no deal document which was released. It read that “The UK can draw on both substantial domestic production and oil imports from diverse international sources, including Europe, meaning that supply is secure.” The same document pointed out that residual risks for the financial service sector remain, it noted that “The EU authorities and some individual Member States have taken legislative steps to prepare for leaving without a deal, which the government welcomes, but in the absence of further actions by EU authorities residual risks remain.”
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The British Pound came under pressure as the chances for a Brexit deal are slim after the EU hardened its stance. The GBPSGD dropped to a double support level, consisting of its horizontal support level and its primary ascending support level, from where a short covering rally is anticipated to take price action back into its horizontal resistance area. The CCI dropped into extreme oversold conditions, but this momentum indicator remains well off of its lows. Open your PaxForex Trading Account today and join one of the fastest growing trading communities in the forex market!
Brexit deal or not, the Eurozone has plenty of economic worries to deal with. This is expected to drive the Euro lower and as the EURHUF is trading close to its horizontal resistance area, a sell-off is expected to push price action back down into its next horizontal support level. Hungary may assist the UK in Brexit which would grant the country special access to a post-EU UK. This is expected to tremendously assist Hungary and strengthen the Forint, if it indeed plays out. The CCI has recovered from a plunge into extreme oversold territory, but is expected to revert as bullish momentum is easing. Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month!
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Selling pressures in Bitcoin are easing as this cryptocurrency is trading at support levels. A sideways trend inside the horizontal support area has emerged which is expected to result in a double breakout, above its primary and secondary descending resistance levels, and take price action back into its next horizontal resistance level. The CCI has moved out of extreme oversold conditions and momentum is expected to take this technical indicator above the 0 level for a bullish momentum crossover. Follow the PaxForex Daily Forex Technical Analysis and grow your balance trade-by-trade!