Following months of stalemate talks, it finally looks as though the EU and UK will be able to agree a trade deal after-all. With just weeks before the UK officially exits the single market at the end of the transition phase, the two sides appear to have struck an agreement over the Northern Ireland customs checks.

Significant Breakthrough

The issue of how to handle Northern Ireland once the UK leaves the EU has been one of the most contentious and divisive issues within negotiations between the two sides. The UK government had initially been planning to override parts of the Withdrawal Agreement signed by itself and EU leaders in the event that talks broke down so as to prevent there being a hard border in place. However, it has now been confirmed that the UK will remove parts of its controversial Internal Markets Bill putting such powers into law. A compromise has been struck over the border issue and while the details have yet to be published, there is now a great deal of optimism that a full deal can be agreed before December 31st.

Johnson & von der Leyen To Talk Again Today

The head of the European Commission, Ursula von der Leyen is now due to meet with UK PM Boris Johnson later today in a bid to help further push talks over the line. Commenting on the ongoing negotiations, the UK PM said that he hopeful a deal can be agreed, though admits that the situation is “very tricky”. The breakthrough in talks comes just one week after the EU’s chief Brexit negotiator, Michel Barnier warned that the risks appeared tilted towards a no deal outcome.

Fishing Access Still A Big Threat

Despite the breakthrough, however, there are still some other key issues which remain unresolved. The issue of EU access to UK fishing waters in the wake of Brexit still remain a highly contentious factor. Commenting further, ahead of the upcoming talks, the UK PM said: "We will see where we get to in the course of the next two days, but I think the UK government's position is that we are willing to engage at any level, political or otherwise, we are willing to try anything.

Technical Views

EURGBP

EURGBP has recently rallied off the latest test of the .8868 level support which has underpinned price action since May. For now, price remains below both the .9166 structural resistance and the bearish trend line from year to date highs. While below here, risks appear tilted to the downside and an eventual break of the .8868 level.

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