GBPUSD tumbles below both 100 and 200 day moving averages
GBPUSD fell 0.92% and broke below key technical support levels as UK political uncertainty intensified after a cabinet resignation and potential leadership challenge.
GBPUSD tumbled 0.92% on Thursday, breaking below both the 100-day and 200-day moving averages for the first time in weeks, as political turmoil in the UK added to selling pressure on the pound.
The sharp move lower came after UK Health Secretary Wes Streeting resigned, fueling speculation about a potential leadership challenge to Prime Minister Keir Starmer. Adding to the uncertainty, Andy Burnham, the Mayor of Greater Manchester, emerged as a possible contender after Labour MP Simon indicated he would step aside to allow Burnham to return to Parliament. The political instability has compounded existing headwinds for sterling, which was already under pressure from a weak economic outlook and expectations that the Bank of England may cut rates sooner than previously anticipated.
For currency traders, the breakdown below both the 100 and 200 day moving averages is a bearish technical signal that could attract further selling. The pair had shown warning signs on Wednesday when buyers initially defended the 200-day MA, but the failure to hold that level today suggests momentum has shifted decisively to the downside. Traders can monitor real-time GBPUSD price action on NowPrice's live FX dashboard to track the pair's reaction at these key technical levels.
Looking ahead, the focus will be on any further political developments in the UK, including potential statements from Prime Minister Starmer or other Labour figures. On the data front, UK retail sales and inflation figures due next week will be closely watched for clues on the BoE's policy path. A break below the next support level at 1.2400 could open the door to a test of the January low near 1.2250.