EUR/GBP bracing for next chapter in Brexit, risks titled to upside 0.8775/8810 band

The hourglass is running down to the last granules of sand as the UK Parliament open the next chapter of the Brexit saga this week when some amendments to May's proposed deal will be voted on, tabled by cross-party MPs unsatisfied with the current withdrawal bills that were proposed. The most critical anti-no deal amendment to watch would be one tabled by Evette Copper, obliging the government to extend the Brexit deadline if an agreement had not been struck by the end of next month.

Nick Boles, the Tory backbencher who is pushing for the plan alongside Cooper, argued it was vital this amendment attract enough support to be passed. “If we don’t seize the moment tomorrow afternoon, then we’re at grave risk of just driving off the edge on 29 March, without really wanting to, and when there might be a compromise that we could achieve if had a few more months,” he told BBC Radio 4’s Today programme.

However, there is growing speculation that such an amendment will not drive in the votes needed to carry it forward. For instance, Jon Trickett, the shadow Cabinet Office minister, speaking to voters in his constituency, he learned that many would regard support for the measure on Tuesday as a failure to respect the result of the 2016 referendum.

“What they said is, look, we voted remain, but we’ve had a vote: get on with it. And I think that probably does capture a large swath of opinion in the country. That’s how I feel about this amendment. I feel that it may look to people as if we’re trying to remove somehow the earlier decision, which was to Brexit.”

Draghi testifying to Parliament

In other news, ECB's Draghi had been testing to EU Parliament today - (ECB's Draghi: Uncertainties relating to geopolitical factors and threat of protectionism is weighing on economic sentiment).

• The balance of risk to economic outlook move to the downside.
• Over the past few months, incoming information has continued to be weaker than expected on account of softer external demand and some country and sector-specific factors.

EUR/GBP levels

Analysts at Commerzbank explained that EUR/GBP has sold off to the 0.8620 2018 low, which is holding on a closing basis. "We would allow for a possible rally back into the 0.8775/.8810 band ahead of failing. Failure at 0.8620 would suggest an ongoing weakness to the base of the channel at 0.8547 and potentially the 200-week ma at 0.8341."