GBP/USD is benefiting mostly from a weaker dollar to start the day
Cable is enjoying a steady start to the new week as the greenback is mostly softer against the rest of the major currencies bloc today. The focus of markets thus far is the risk-on mood but for the pound, the focus will be on the second round of indicative votes later today.
After May lost yet another vote on Friday, cable fell below the 1.3000 handle but found support from the 200-day MA before recovering into the close. That level now sits at 1.2975 so that would be a crucial support level to watch out for in trading later.
Meanwhile, any upside jump will have to crack through resistance from the 100 and 200-hour moving averages @ 1.3129 and 1.3154 respectively.
Looking ahead to the votes later, it could help to indicate that lawmakers would prefer a softer Brexit and that will be good news for the pound. However, how feasible and workable those plans are is a question that leaves plenty to be desired. If anything, this feels more like brainstorming and theory-crafting rather than voting on actual solutions.
All that said, May could still insist on a no-deal Brexit - though parliament will do all they can to block this - or a longer extension instead before the end of next week. However, that only means that the uncertainty is being prolonged and there's no clear way forward still in this entire ordeal.
For now, traders will still have to weigh out those probabilities with the 1.3000 level still being the "mid-point" in my view. Let's see how things develop today before knowing on how Brexit developments will shape up in the coming days.
One thing is for sure though, expect more choppiness and volatility to follow.
