The UK government explicitly acknowledged last week that it could break international law by ignoring some parts of its European Union divorce treaty, prompting strong responses from EU leaders. Former British prime ministers Tony Blair, Gordon Brown and John Major said Britain must drop the “shocking” plan to breach international law. Johnson’s predecessor, former PM Theresa May, is said to be part of a growing numbers of Conservative backbenchers who are also against the legislation draft. The House of Commons will debate the Internal Market Bill later today. Sterling fell to a 5 month low of 92.90 pence per euro and last stood at 92.36.
The EU has ramped up no-deal Brexit preparations while Britain has dismissed an ultimatum from Brussels to scrap the main parts of the bill by the end of September. The EU says it cannot trust those who break agreements and that if the bill is not effectively scrapped there will be no trade deal to cover everything from car parts to food.
In the hourly chart, EURGBP has broken through the 20EMA and is now testing the 40EMA with a new resistance forming just below 0.9225. RSI is showing a fairly balanced market.