GBP/USD held at 1.3528 on Thursday following an overnight decline. The pound remains under pressure, close to its lowest levels since late April, amid media reports of a potential leadership contest within the ruling party. According to The Times, British Health Minister Wes Streeting is preparing to launch a campaign against Prime Minister Keir Starmer.
Despite pressure from parts of the government and more than 80 Labour Party MPs, Starmer has reiterated that he does not intend to resign following the party’s weak performance in the local elections. The cabinet composition remains largely stable, despite a few resignations from junior ministers.
External factors continue to weigh on the pound. Talks between the US and Iran remain inconclusive, while restrictions in the Strait of Hormuz keep oil prices elevated. Against this backdrop, the market continues to price in nearly three Bank of England rate hikes by the end of the year.
Investors are also awaiting the release of new UK macroeconomic data, including first-quarter GDP figures.
Technical Analysis
On the H4 chart, GBP/USD is trading within a broad consolidation range above 1.3515, currently extending up to 1.3530. A move lower towards 1.3480 is possible. After this, the pair may consolidate before attempting a move higher towards 1.3650 or a further decline towards 1.3340. The MACD indicator supports this scenario, with its signal line below zero and pointing firmly downwards.
On the H1 chart, GBP/USD is trading within a compact consolidation range around 1.3515, currently extending down to 1.3483. A rebound towards 1.3530 (testing from below) is possible, followed by a potential move lower towards 1.3480. The Stochastic oscillator confirms this scenario, with its signal line below 50 and pointing firmly downwards towards 20.
Conclusion
GBP/USD remains under dual pressure from domestic political uncertainty and global economic risks. Further weakness in the pound is possible if leadership concerns and geopolitical tensions persist, while UK GDP data may act as a short-term catalyst for volatility.
