GBP/USD touches a low of 1.3051 on the session

There is a report out by Germany's IW economic institute saying that a no-deal Brexit could cut German exports to the UK by 57% and that may be one of the reasons why the pound was sold off a little moments ago. But that appears more coincidental in my view as the report also outlines the fact that German firms will face billions in extra tariffs in such a scenario too. A doom and gloom report, but something worth mentioning I suppose.

Either way, the pound has been a bit on the decline as staying above the 1.3100 handle has been proving to be a tough ask this week for buyers. Today's high reached 1.3106 before price backed off again in another setback for the pound.

Right now, price is leaning on the 38.2 retracement level @ 1.3053 but the key test will lie in that of the hourly moving averages. The 100-hour MA (red line) is at 1.3041 while the 200-hour MA (blue line) is at 1.3040.

If price stays above that, near-term bias remains more bullish. Break below and the near-term bias turns more bearish instead. Below that, further support is seen at the 50.0 retracement level @ 1.3028, which helped to stall yesterday's lows, followed by the 1.3000 handle.

The next key risk event for the pair remains that of Brexit and will come in the form of UK Brexit secretary Dominic Raab's update on negotiations later in the day.

As for upside moves, the inability to stay above the 1.3100 handle continues to make cable an attractive proposition to sell whenever it gets close to there but that rhetoric could well change after Raab's appearance later.