GBP/USD touches a low of 1.3005 on the day now
Of note, price is starting to slip back below the 100-hour MA (red line) and if sellers manage that, it would mean the near-term bullish momentum will be broken. However, there is still key support and light bids sitting around 1.2995-00 that will help to defend that bias for the time being.
There isn't much Brexit headlines of note today but in general the headlines this week hasn't been too positive for the pound. Firstly, there's the fact that the European Union would not be able to offer the needed assurances before next week's Brexit motion in parliament. Hence, that throws a bit of uncertainty up in the air.
Secondly, we've seen a dozen lawmakers now resign from both the Labour and Tory parties, signaling a potential crack in the UK political framework because of Brexit. If this leads to a mass exodus of some sorts, this could create more political uncertainty ahead of what is already a big mess in getting Brexit sorted out.
In my view, the 1.3000 handle is very much the middle ground in balancing out Brexit optimism and pessimism and a move back towards the figure level here suggests that whatever positive sentiment from earlier this week is very much all sapped out by now.
All eyes will turn towards the Brexit motion vote next week, so until then expect the pound to continue trading choppily with headline risks aplenty. If cable starts to slip below 1.3000 though, expect more sellers to join in and aim towards the 200-hour MA (blue line) which is now at 1.2936.
