GBP/USD edged down on never-ending Brexit saga

• GBP is under pressure amid ongoing Brexit squabbling.
• GBP is a victim of UK politics rather than economics.

GBP/USD is now trading around 1.3964, in the New York session, edging down 0.08% and well off the day high on the never-ending Brexit saga. GBPUSD made a day high of 1.4069 so far on Monday on hopes of an orderly Brexit backed by the main opposition Labor party. But the ongoing Brexit drama took another turn on Monday after Labor party took a different stance instead of a softer approach towards Brexit. Labor party leader Corbyn said that the UK is still in dark over May’s Brexit plans.

Corbyn is basically seeking a completely different Brexit deal on some fresh idea about a new customs union with  the EU so that the UK could trade seamlessly with the EZ without paying any duties. This will cause problems for May who has said the country will leave. The UK Parliament is generally in favor of staying and so this raises the possibility of a lost vote somewhere down the line.

Also, Theresa May’s office has already rejected the idea of a new customs union by Corbyn. UK government said that the UK will not be joining a customs union after Brexit as par the official position on customs arrangements set out last summer. UK is looking forward to a constructive discussion with EU's Tusk this Thursday and will also hold a cabinet meeting on Thursday ahead of Friday's speech to EU by Prime Minister May.

Meanwhile, EU’s Tusk has commented that the UK's approach to the next stage of Brexit negotiations seems to be based on "pure illusion" and UK was still trying to "cherry pick" its future relationship with the EU.

In another Brexit event,  the UK’s Office for Budget Responsibility is set for an embarrassing u-turn as it prepares to dramatically hike forecasts for UK growth just months after they were suddenly downgraded.

Also, media reports suggested that three cabinet ministers warned PM May during private talks on Brexit at her firm house last week that her government could collapse this year. According to some reports, senior ministers said there are discussions about whether the prime minister should turn the vote into a confidence issue, threatening a general election if Tory MPs vote with the opposition.

On Friday, the cable advanced, finding some support after the BOE´s Deputy Governor Ramsden said in an interview that rates may need to be raised sooner than previously thought due to signs of accelerating UK wages´ growth.

Also, GBP rose on the Friday afternoon after reports that the 11-members of the UK Brexit cabinet committee have agreed on a proposal for post-Brexit trade with the EU. The framework is reportedly dubbed as "Canada plus plus plus" by David Davis, the Brexit secretary, as it aims to establish a similar trade deal that Canada achieved, but with better access to the EU's single market. Although as par another report, EU may reject the idea completely.

Technically, amid all these Brexit squabblings and UK politics, GBPUSD now needs to sustain above the 1.4050-1.4075 zone for a further rally toward the 1.4108-1.4146, 1.4208-1.4280 and 1.4345-1.4452 areas; otherwise sustaining below 1.4020, it may again fall towards 1.3932-1.3825 and 1.3738-1.3656 and 1.3571-1.3418/1.3343 zones in the coming days.