EUR/GBP: PM '(May as well throw darts at a dart board)' May' or 'May 'not make Brexit statement

Trading the cross? You may just as well throw darts at a dartboard. EUR/GBP has been all over the charts on Wednesday and the hourly chart is not a picture for the faint-hearted. The cross has chopped its way through both the European and US session as it prepares for a major breakout way or the other depending on the outcome of PM May's Cabinet meetings and a subsequent finalized deal that she will then take to Parliament. However, this will be just where the real fun starts and we can expect to see additional volatility throughout the Parliamentary proceedings whereby the sceptics are positioned for the government losing a vote. 

"We still think ‘no deal’ will be avoided in the end – allowing a re-pricing of the BoE cycle some further GBP strength, but for now, it is too soon to get carried away,"

analysts at ING argued. 

Possible outcome: What if Parliament votes for a snap election? - (ING Bank)

Analysts at ING Bank explained that in this case, one possible scenario is that Parliament votes for a snap election:

• "For this to happen, two-thirds of MPs would need to vote in favour of a no-confidence motion, which implies that a large chunk of Conservative lawmakers would need to support the idea. To us, this seems unlikely. While many Conservatives may oppose the deal, a snap election could feasibly see Labour elected into power, who may well opt to pursue a much softer stance on Brexit. This option may appear even more unattractive to Tory Brexiteers than the deal itself. But even if an election doesn't take place, then the political pressure for Theresa May to return to the negotiating table is likely to be immense."
• "The problem is that the EU is unlikely to be in the mood to shift position – particularly on the legally-binding issues such as the Irish backstop and the UK’s financial liabilities. So apart from some cosmetic changes on the political declaration – a vague document that will outline the ambition for future trade talks – it’s unlikely that Theresa May will be able to yield many more concessions."

EUR/GBP levels

The chop is between 0.8750 and 0.8679 with 0.8700/10 being the downside support on the five-minute charts lining up with the 200-5 min SMA. However, on a wider trade, 0.8773 is the 100% retracement target guarding 0.8800, (that will not matter much on a Brexit volatility spike) ahead of the 161.8% extension target of the recent hourly ranges. 0.8831, 0.8872 and then 0.8939 come as next Fibos. On the flipside, below the 0.8650 target will open a run to 0.8620 as the last defence of the sideways channel that commenced at the start of Sep.