GBP/USD supported post critical vote on political Monday

For now, UK’s Boris Johnson is in office, but there are several questions over his leadership on a poor outcome in the vote. The British pound found buyers at a 61.8% ratio as the UK PMs survived political Monday’s parliamentary confidence vote.

At 1.2530, GBP/USD is starting out resting at hourly support on the Fibonacci scale, coming closer to the 61.8% golden ratio. This is following a slide overnight as UK political tensions combined with the stronger US dollar.

The pound bulls have moved in to support the currency around a confidence vote on Monday after a growing number of lawmakers in Boris Johnson’s Conservative Party questioned the British leader’s authority over the party gate scandal.

The majority of 359 Conservative lawmakers, at least 180, had to vote against Johnson to be removed from office, a level some Conservatives said might be difficult to reach given the lack of an obvious successor.

At least 169 British lawmakers from Johnson’s Conservative Party had publicly indicated support for him ahead of the vote. The outcome left the PM safe but the vote also proves that he has little support from within his party which hangs like danger on a rope over his leadership.

Boris Johnson won the support of 211 members of the parliament but 41% of his party voted to get rid of him. It was the worst decision on a sitting prime minister by their own party in the modern British history.

Meanwhile, the US dollar gained against a basket of major currencies on Monday as risk appetite diminished from earlier levels. After touching a near 20-year high of 105.01 on May 13, the US dollar index was pulling up in the bull’s commitment from around the 102 level.

On the US t; Friday’s strong NFP data helped the dollar to recover as traders now count down to the Fed’s policy decision on Wednesday, 15 June, in which the US policymakers are widely expected to hike rates by 50 basis points. Ahead of that, traders and investors will look to Friday’s reading on Consumer Price Index for signs of how long the Fed may continue its rate hike path.

The price on the H4 chart is leaning bearish. A break of the 61.8% ratio could lead to a retest of the support structure. A break of this point will make the anticipations open for a run below 1.2500 and towards 1.2350 for the days ahead.