Global macro overview for 05/12/2017

The highly anticipated next step to break up in Brexit negotiations between Britain and the EU have finally collapsed. The question of setting the border (for trade and passenger traffic) between the UK and the EU is a dispute, and the difference of opinion concerns the island of Ireland. Brussels would like Northern Ireland to be regulated, while Belfast demands equal treatment with the rest of Britain. Prime Minister May reckon with the opinion of the DUP, the largest party in Northern Ireland, which supports the May government in the parliament. Although May and Juncker stressed yesterday that "sufficient progress" should be reached by the EU summit on December 14, it gives more than a week of discussions and changes, and above all shows that Brexit negotiations are not and will not be an easy process. For GBP, this means that once again many traders have burned in the trade of optimism for the entire operation and the capitulation will be a ballast pulling the pound down. Of course, until the press does not reach another positive revelation.

Let's now take a look at the GBP/USD technical picture at the H4 time frame.The high at the level of 1.3549 might be considered as the top of the wave 2 and indeed the price is moving lower. The nearest support is seen at the level of 1.3368 and then at the level of 1.3220. Please notice the diminishing upward momentum supports the bearish outlook.

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