Sterling has been rising since parliament's resounding defeat of PM May's first Brexit plan nL1N1ZF2AB convinced traders that a hard Brexit was less likely, and its immediate prospects depend on MPs continuing that in today's voting on amendments [see: Click here].
GBP/USD is currently holding near recent 3-month highs by 1.3200.
The most likely to win approval nS8N1Y2022 appears to be MP Yvette Cooper's Amendment B, which would give May until Feb 26 to get a deal through parliament and, failing that deadline, lawmakers would then vote to ask for a extension of Brexit (Article 50) until Dec 31, 2019.
The increased likelihood of the UK not crashing out of the EU without a deal has boosted GBP/USD from a low of 1.2670 on January 15 to current levels near 1.3200.
Taking no-deal Brexit off the table would likely push GBP/USD to new trend highs, with resistance seen at 1.3295 the Sept 20 high and 1.3492 May 22 2018's high.
While relief from a no-deal Brexit scenario would support the UK economy and the pound, May faces a Herculean task trying to get the EU to modify the existing agreement, which is a significant headwind for GBP/USD.
GBP Chart: Click here