GBP/USD: Heavy on 'vote of no confidence' news wires, printing fresh 2018 lows below 1.2500
- GBP/USD is sitting heavy on the lows of the early Asia session following news wires that PM May is likely facing a vote of confidence.
- Sterling dropped to a fresh low for 2018 trade of 1.2482 on the sentiment.
The news came from UK Conservative Lawmaker, Bridgen who believes that the threshold to trigger a vote of no confidence had been met - (A senior MP in the ERG said that Brady had received 53 letters, five more than the 48 threshold). Over 48 Conservative MPs have now submitted letters of no confidence in Theresa May which is enough to trigger a formal no-confidence vote on her leadership according to multiple reports on Tuesday. PM May on Wednesday is expected to be told she will face a “vote of no confidence” among Conservative MPs after the intervention of a senior former Cabinet minister, The Telegraph has disclosed:
"Owen Paterson, a former Northern Ireland and Environment Secretary who backed leave in the referendum, on Tuesday night wrote to Sir Graham Brady, the chairman of the 1922 committee of Conservative MPs, formally stating he had lost confidence in the Prime Minister. There was growing speculation that Sir Graham had now received the 48 letters required to trigger a vote, which is expected to lead to a full-scale leadership contest in the coming weeks."
- The Revanchists of Brussels
If this is confirmed, Brady will likely make a public announcement on Wednesday. This follows May's decisions to cancel the crucial "meaningful vote" on Monday that was supposed to be Tuesday and it has enraged MPs across the House of Commons by making a late decision to delay the vote where she was expected to be humiliatingly defeated. A Brexiteer Cabinet minister has said that May would be "gone by Friday."
- Support levels: 1.2490 1.2465 1.2430
- Resistance levels: 1.2550 1.2590 1.2640
Valeria Bednarik, Chief Analyst at FXStreet explained that the pair is down for a sixth consecutive week but there are no signs of downward exhaustion, neither of an upcoming change in the current downward trade:
"The pair is trading below Monday's closing level and posted a lower low and a lower high daily basis, signaling bears hold the grip tight. In the shorter term, and according to the 4 hours chart, the risk is also skewed to the downside, as the 20 SMA accelerates south well above the current level, while technical indicators quickly resumed their declines after correcting oversold conditions, now maintaining strong downward slopes."