Cable Plunges on Rising UK Political Uncertainty
Pound Under Pressure
The British Pound is coming under heavy selling pressure today with GBPUSD hitting fresh 1-month lows. Part of the move lower is in response to a stronger US-Dollar which has risen on safe-haven demand following news over the weekend of joint US/Israel military action against Iran. The killing of the Iranian Supreme Leader has led to widespread retaliation from Iran with fears now of a drawn-out conflict emerging. Against this backdrop, USD has seen a strong uptick in safe-haven demand, putting fresh pressure on key FX counter-parts.
UK Political Uncertainty
Alongside the impact of a stronger US Dollar, GBP is also weakening as a result of rising political uncertainty in the UK. The ruling Labour Party suffered a shock defeat in local by elections in Gorton and Denton, having comfortably won that seat in the 2024 general election. The fear now is the move will prove representative of a broader shift in the UK electorate at the upcoming local elections in May.
Bearish Risks
Near-term, GBPUSD remains vulnerable to further downside given the broader focus on the US/Iran story. If USD continues to strengthen on safe-haven inflows, the pair has room to push lower near-term. Incoming UK data will also be watched with any fresh downside likely to see accelerated GBP selling.
Technical Views
GBPUSD
The sell off has seen the pair breaking down below the 1.3434 level with price finding support for now at a test of the bull trend line off the 2025 lows. With momentum studies bearish, risks of a further push lower are seen with the 1.3177 level the next big support zone to watch should the trendline break.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.