GBP/USD edges higher towards 1.4200, crunch Brexit talks before G7 eyed – FXStreet

GBP/USD eases from the intraday top, up 0.06% on a day around 1.4165, heading into Wednesdays London open. In doing so, the quote rises for the third day in the last four, except the previous days drop, amid broad US dollar weakness. It should, however, be noted that cautious sentiment ahead of todays key Brexit talks over the Northern Ireland (NI) border issues probe the optimists.

US dollar index (DXY) reverses the previous days gains around 90.05, down 0.07% as Treasury yields consolidate recent losses around the monthly low. Also testing the greenback bulls could be the mixed concerns over China and US President Joe Bidens infrastructure spending. Worries over the Feds next move and Thursdays key US CPI, not to forget the ECB, also favor USD sellers amid a sluggish session.

On the other hand, the lowest covid-led death toll in England and Wales help UK PM Boris Johnson to stay firm on his June 21 deadline for unlock even as the market chatters back a fortnight extension. Further, strong comments from Bank of Englands (BOE) Chief Economist Andy Haldane, relating to the housing market, firm up the calls of tapering and back the GBP/USD bulls in turn.

However, Brexit deadlock over the NI protocol and a less likely solution during todays meeting between the European Union (EU) Maro efovi, European Commission Vice Presidentand UKs David Frost probe the sterling buyers.

As per the latest updates from the BBC, The UK's Brexit minister Lord Frost has urged the EU to show common sense during talks over post-Brexit rules in Northern Ireland. On the same line, Reuters said, EU President Ursula von der Leyenhas expressed her deep concern on the implementation of post Brexit arrangements in a phone call toBoris Johnson.

On Tuesday, EUs efovi warned the UK while saying, per Reuters, Brussels will start a trade war with Britain if Boris Johnson overrides the Brexit treaty so that Northern Irish shops can keep selling British sausages.

Given the contrasting outlook of the ex-neighbors, todays Brexit talks are likely not to overcome the deadlock on the key issues, which in turn may weigh on the GBP/USD prices going forward. Its worth mentioning that US President Joe Biden is up for meddling into the key Brexit subject resolution, which in turn gives another reason for todays negotiations to fall.

Although an ascending trend line from April 12, near 1.4110 defends GBP/USD bulls, 1.4210 guards the quotes short-term upside. Its worth noting that 1.4190 and 21-day SMA near 1.4145 act as extra filters amid a likely sideways grind.

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GBP/USD edges higher towards 1.4200, crunch Brexit talks before G7 eyed - FXStreet