GBPUSD drops nearly 1% as speculation over a Labour leadership challenge rattles markets and breaks critical technical support levels.
The British pound fell 0.92% against the US dollar, leading losses in the FX market as political uncertainty in the UK intensified. The resignation of Health Secretary Wes Streeting and reports of potential leadership challenges to Prime Minister Keir Starmer weighed on sentiment, with Andy Burnham emerging as a possible contender for the role.
Technical indicators worsened as GBPUSD broke below its 100-day and 200-day moving averages, along with key retracement levels at 1.34669 and 1.3408. The pair hit a low of 1.3396 before a weak rebound, trading near 1.3398, signaling sustained selling pressure.
The move follows a failed defense of the 100-day moving average yesterday, with today’s decline accelerating after support levels collapsed. Analysts noted the recovery lacked conviction, reinforcing bearish momentum heading into the next trading session.