GBP/USD rallies to session tops, around mid-1.3200s but lacks follow-through

   •  Rees-Mogg's comments raise hope of a potential softening of stance by the ERG.
   •  May's deal likely be tabled for a third meaningful Parliament vote on Wednesday.

The GBP/USD pair rallied over 80-pips from daily lows and surged to fresh session tops, around mid-13200s during the mid-European trading session.

The pair witnessed a dramatic intraday turnaround and once again managed to find decent support near the 1.3160-55 region after leading Brexiteer Jacob Rees-Mogg hinted that he may be forced to support Theresa May's Brexit deal rather than risk the UK staying in the EU.

His comments raised hopes of a potential softening of stance by Tory lawmakers and the ERG, significantly boosting prospects for the PM May's Brexit deal to be tabled in the Parliament for a third meaningful vote, as early as tomorrow.

This comes a day after the House of Commons voted to seize control of the process from the government and enabled MPs to hold indicative votes on Brexit options - including the options to avoid the Brexit altogether or a second referendum.

However, market participants remain convinced that May might still struggle to gain enough support to pass the relevant legislation through the parliament and seemed to be the only factor capping any strong follow-through momentum, at least for the time being. 

Hence, it would be prudent to wait for a strong follow-through buying before positioning for any further near-term appreciating move, possibly beyond the recent multi-month highs, towards reclaiming the 1.3400 round figure mark.

Technical levels to watch