GBP/USD Forecast: Sterling on a back foot ahead of Brexit Plan B debate

• The GBP/USD is trading little changed on the downside ahead of the UK parliamentary debate on Plan B for Brexit scheduled for the afternoon.
• The UK Prime Minister Theresa May reportedly accepted Brady’s amendment calling for the planned Irish backstop to be replaced by "alternative arrangements".
• The Brexit Plan B amendments will be debated and eventually voted in the House of Commons later today, or during this week.

The GBP/USD is trading on a backfoot at around 1.3130 on Tuesday ahead of the Uk House of Commons starting its debate and eventually voting in the amendments to Brexit deal proposed by the members of parliament.

The UK Prime Minister is said to accept so-called Brady’s amendment calling for the planned Irish backstop to be replaced by "alternative arrangements". Such a solution is expected to be rejected by the European Union.

Sterling rose 3.1% this year so far and it is the best performing major currency so far with spot FX rate reaching 1.3214 late last Friday as the market priced in almost zero chances of a no-deal Brexit. Ahead of the Brexit amendments vote, the uncertainty increased and it is weighing on Sterling.

Technically the GBP/USD jumped above downward sloping trendline and by breaking above 1.3000 it has also conquered the major resistance line representing 38.2% Fibonacci retracement of the upmove from 1.2130 to 1.4177.

The technical oscillators including the Relative Strength Index and Slow Stochastics are both elevated with Slow Stochastics making the bearish crossover in the Overbought territory. The GBP/USD rose to a fresh 15-week high of 1.3214 and the GBP/USD is set to experience the further corrective pullback. The bullish breakout of the Fibonacci level of 1.2990-1.3000 becomes a support level now and the first price target on the downside.  On the upside, the immediate resistance is at around 1.3150.

The GBP/USD daily chart