The pair fell to 1.3193 on Wednesday. The pound came under pressure amid a stronger US dollar and political uncertainty in the UK following the announcement of Prime Minister Keir Starmer's resignation.
Andy Burnham is considered the leading candidate for the position of head of government and has already received the support of several influential figures within the ruling party. In general, markets are taking the prospect of his appointment positively, as investors expect a smooth transfer of power without major shocks to the economy or financial markets.
The appointment of a new finance minister also remains the subject of attention. Wes Streeting is seen as the favorite for the role. Market participants see him as a more predictable and business-friendly candidate.
Weak macroeconomic data added further pressure on the pound. According to S&P Global, business activity in the United Kingdom contracted in June at the fastest rate since April 2025. The composite PMI fell below the 50-point mark, indicating a decline in economic activity. The services sector recorded its weakest performance since the beginning of 2023.
In this context, the pound fell against the US dollar, although it showed little change against the euro. Investors are assessing the prospects of the new political team and its ability to support the economy. Meanwhile, the UK economy remains close to stagnation.
Technical analysis
On the GBP/USD H4 chart, the market completed a downward wave to 1.3185. We expect a growth phase towards 1.3200. In practice, a wide consolidation range is forming below this level.
If the pair breaks out of the range to the upside, it will open the potential for the wave to continue towards 1.3240. If the pair breaks lower, it will open the possibility of continuing the decline towards 1.3140.
Technically, this scenario is confirmed by the MACD indicator. Its signal line is below the zero mark and points firmly downwards.
On the H1 chart, GBP/USD has formed a compact consolidation range around 1.3222. At the moment, the range has widened down to 1.3185. Further growth towards 1.3200 is expected, followed by a decline to 1.3140.
The stochastic oscillator also supports this scenario. Its signal line is below 50 and pointing firmly towards 20.
By RoboForex Analysis Department
Disclaimer
Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
