Boris Johnson: EU talks are in a serious situation

Boris Johnson has stated that EU talks are in a serious situation.

''It now looks very likely agreement won't be reached unless EU positions shift substantially.''

Reporters

Sky News Europe Correspondent, Adam parsons states, ''EU diplomatic sources have told me that fishing, rather than the level playing field, is now the most difficult issue in negotiations. Talks are continuing.''

Laura Kuenssberg at the BBC said, ''And the No 10 version - unless the EU budges, we're drifting towards no deal.

“The PM underlined the negotiations were now in a serious situation. Time was very short and it now looked very likely that the agreement would not be reached unless the EU position changed substantially."

These headlines follow a series of negative comments from various officials on both sides of the channel:

• Von der Leyen: Big differences remain, negotiations will continue tomorrow
• Brexit News: UK's Gove says Brexit talks could go beyond Christmas

GBP/USD update

The prior comments from Gove and Von der Leyen shook some longs out of the picture.

And then Johnson's comments tipped the price over the edge to the lower bounds of near term support as follows:

The price has subsequently broken the first layer of support and now tests the next layer which would be expected to hold initial tries. 

What to expect from here?

If the bears throw in the towel here, the correction back to test the prior lows would be expected of the M-formation:

A full 61.8% Fibonacci retracement or just a 50% mean reversion would likely attract further selling pressures and result in a downside extension in a fresh bearish impulse into deeper demand territory.