Over the past 24 to 48 hours, the GBP/USD currency pair has shown notable weakness, dipping slightly from yesterday’s closing price of 1.31933 to around 1.3163, near its late March low of 1.3160 support. The recent decline in the British Pound is mainly driven by heightened political uncertainty in the UK, especially following Labour leader Keir Starmer’s announcement to step down as Prime Minister. This has fueled concerns over the UK’s policy direction, prompting investors to favor the safe-haven US dollar, strengthening USD against GBP. Additionally, lackluster UK business survey data signals a slowdown in economic momentum, reinforcing expectations that the Bank of England might hold interest rates steady, which adds further pressure to the GBP.

Meanwhile, robust US PMI data has supported the dollar’s gains, limiting any significant GBP/USD recovery attempts. Despite repeated tests of key resistance, the US dollar remains firm amid easing geopolitical tensions from positive progress in US-Iran talks. For investors, the recent GBP dip reflects a combination of political risk and economic slowdown concerns in the UK. It’s crucial to stay updated on UK political developments and upcoming economic releases to gauge the future direction of the British Pound.

Daily Chart

The daily chart of GBPUSD shows a clear downtrend developing since mid-June after a prior uptrend. The price remains below both the 50-day and 200-day moving averages, confirming medium to long-term bearish momentum. Bollinger Bands have contracted, indicating reduced volatility and lack of strong directional conviction. The MACD remains below zero with increasing negative histogram bars, suggesting continued selling pressure. Overall, the daily chart structure points to sustained weakness, with any rebounds likely facing stiff resistance unless a significant fundamental change occurs.

1H Chart

Examining the hourly chart over the past 3-5 days reveals a descending flag pattern forming near the 1.33 high, as the price declines toward support around 1.3160. Short-term moving averages have formed a bearish crossover, signaling dominant downward momentum. Recent candlesticks feature long upper shadows, reflecting selling pressure at higher levels. Though MACD is approaching a bullish crossover, confirmation is pending, indicating that price may continue to range between 1.3160 and 1.3250 in the near term.

Technical Trend:  GBPUSD is currently in a cautiously bearish consolidation phase, with market sentiment leaning toward risk aversion amidst uncertainty.

Technical indicators remain bearish for GBPUSD, with the 50-day and 200-day moving averages acting as significant resistance levels. Momentum oscillators like MACD and RSI reflect weak buying interest. Recent long upper wick candles indicate seller dominance, suggesting the downtrend may persist until technical signals turn more bullish. A fundamental catalyst such as political stability or US-UK policy changes would be necessary to reverse the current trend.

Today’s global economic calendar highlights key US data releases in the late session, including the Current Account and New Home Sales figures. A larger fiscal deficit could weigh on the US Dollar, whereas stronger home sales might bolster it, impacting GBPUSD accordingly. European indicators like Germany’s Ifo Business Climate will provide regional insights but are less likely to influence GBPUSD directly. There are no major UK data releases today, keeping political developments as the primary driver for sterling moves.

Resistance & Support

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