GBP/USD Forecast: Strong bullish move fails ahead of 1.3300 mark, focus remains on Brexit vote

The British Pound turned out to be the best major currency on Monday and was influenced by a slew of incoming Brexit headlines. The GBP/USD pair initially weakened to near three-week lows in reaction to news that the UK PM Theresa May is likely to change Tuesday's vote from meaningful to provisional vote, albeit witnessed a turnaround after the UK government spokesman confirmed that Brexit meaningful vote will take place on Tuesday. The pair got an additional boost after Irish Foreign Minister Coveney said that the EU was trying to put up a package to provide the Parliament with the reassurances they need. The positive momentum picked up the pace later during the day on news, indicating that the UK PM Theresa May secured legally binding changes to the Brexit deal.

The positive developments came just ahead of the meaningful vote and triggered some aggressive short-covering move. The pair rallied nearly 200-pips intraday and extended the positive momentum further beyond the 1.3200 handle during the early Asian session on Tuesday. Bulls, however, took a brief pause ahead of the 1.3300 handle as the market participants now look forward to a meaningful Parliament vote on the UK PM Theresa May's amended Brexit deal, which if rejected will be followed by a vote on Thursday for an extension of Article 50. With Brexit headlines turning out to be an exclusive driver of the sentiment surrounding the British Pound, today's important UK macro data - monthly GDP growth figures and manufacturing production data, seems unlikely to provide any meaningful impetus. 

Currently hovering around the 1.3200 handle, any subsequent retracement is likely to find immediate support near the 1.3180-70 region, which if broken should prompt some fresh technical selling and accelerate the slide further towards the 1.3100 round figure mark. A follow-through selling below 1.3070-65 horizontal zone might turn the pair vulnerable to head back towards challenging the key 1.30 psychological mark. On the flip side, the 1.3255-60 region now seems to act as an immediate resistance and is followed by the 1.3300 handle, above which the pair seems all set to surpass recent multi-month tops, around mid-1.3300s, and aim towards reclaiming the 1.3400 mark for the first time since June 2018.