GBP/USD is once again approaching the 1.3100 handle

The low so far this year was posted on 21 June - same day as the BOE meeting decision - at 1.3102. The lows so far today was at 1.3106 and it looks like a case of inevitability that we move towards touching the figure level at 1.3100 now.

Trading in the pair remains subdued so far with the range sitting in a measly 15 pips, the high being at 1.3121. But if something can't go up on good news, then what else is there left besides moving down.

I wasn't a big fan of the gains posted in sterling after the BOE statement/votes because no matter how hawkish they may be, at the end of the day it still requires support from key data - which we're not going to get any time soon - and the fact that Brexit talks are going nowhere and gets kicked down the road to October only adds to the uncertainty and negativity.

But cable rose nonetheless owing quite a bit to dollar weakness at the time too, but the highs were kept in-check by the 61.8 retracement level @ 1.3315 and the pair consolidated thereafter before the near-term bullish momentum gets taken out (fall below the 100 and 200-hour moving averages).

Since then, the pair has been moving in the "right" direction in my view but now it's time to put things back into question again. As we approach the year's low and the 1.3100 handle, the technical picture isn't clear until we break below those levels.

There is a barrier sitting at 1.3100 as well, so I would expect defense around the figure level to hold for a bit and actually that's what we've seen so far in trading since the end of the US session.

It's hard to see sterling manage a bounce again here as it would require a key catalyst like the BOE statement/votes that we saw on 21 June. And with incoming BOE member Haskel being much more dovish than McCafferty (the person he is replacing), failure to raise rates in August would only mean things will get tougher down the road since Haskel will be beginning his term in September.

Right now, buyers will be looking to defend the 1.3000 level and would be hoping for a bounce there - along with dollar weakness - so that the technical picture forms a double-bottom pattern.

For sellers, it's all about taking out the figure level. Once that gives way, it'll open up a move towards the 38.2 retracement level @ 1.3055 and the 1.3000 handle - when looking at the bigger picture: