While everyone thought that a Brexit deal is close to being reached, this morning news hit the wires that UK Prime Minister Theresa May is facing additional difficulties at home - within her own Conservative Party. 

Namely, a report by the Telegraph earlier today said that Northern Ireland’s DUP party would back a Brexit amendment proposed by eurosceptics in the Parliament. The amendment will effectively make the EU's Irish border backstop proposal illegal and that can seriously damage the negotiations process.

The issue on the Irish border remains one of the last (if not the last) key points on which the EU and the UK have not reached an agreement and with this proposed amendment the prospects for a deal look even grimmer.

This is why GBPUSD is sharply down today and why it broke below the key 1.3000 support.

Sentiment has now shifted against GBP and a firm Dollar should support a short GBPUSD position over the course of this week.

Technically, GBPUSD makes an important break below the 1.3000 key support area, and, equally important, below the bullish channel in which it was trading since mid-August.

The 1.2800 area now looks likely to be reached. The daily chart of GBPUSD is shown below: