Cable up 340 pips says there's a chance UK won't trigger Article 50, but that's not the case.
The pound is in the midst of its largest rally since 2008 as shorts get squeezed hard.
The headline is that Theresa May has decided to put a final Brexit deal to a vote in Parliament.
"I can confirm today that the government will put the final deal that's agreed between the U.K. and the EU to a vote in both Houses of Parliament before it comes into force," May said.
What's important to note is that this isn't a vote on Article 50; this is a promise to have a vote years from now after a new deal between the EU and Britain is negotiated. That isn't a surprise. It's usually necessary for Parliament to have a vote on trade deals.
Even if Parliament rejected the deal, it would only be a mandate to get a better deal, not to re-enter the EU. Brexit minister Davis clarified that after the speech, saying if Parliament rejects the new EU deal it won't change the fact the UK is leaving the EU.
So if you strip out the vote comment, what did we learn? Much of it was leaked ahead of time but it's clear that May unambiguously wants out of the EU and left no wiggle room to stay. "No deal for Britain is better than a bad deal," she said.
One thing May said that eased some hard Brexit fears was endorse a 'phased approach' to leaving. That's a reason for some pound strength, but is it worth more than the 340 pip rally we've gotten? Well that depends. Much of it just erases some of the recent fears about a hard Brexit -- we're only back to January 6 levels.
Maybe a better question is: Will this squeeze out some of the longer-term GBP shorts? From what we've heard today, I don't think it will.
That said, the technicals are improved if cable can close up here. The next hurdle is 1.2431 and 1.2441, which is the 61.8% retracement of the decline since Dec 14. If that can break, look more consolidation up to 1.27.
Of course, it also depends on what Donald Trump and if he continues to rail against a strong US dollar and what happens in the UK Supreme Court.