What Happened
The British Pound (GBP/USD) extended its losing streak on Friday, falling for a fourth consecutive session and heading for a weekly loss of more than 2%. The pair is trading around the 1.2450–1.2500 zone, with sellers firmly in control. The driver is a double hit: political chaos in the UK around Prime Minister Keir Starmer’s leadership and rising fears of wider UK fiscal deficits, combined with a broad US dollar rally fuelled by elevated Iran-related geopolitical risk.
Key Levels
- Support 1: 1.2400 — a psychologically significant round number and near-term floor
- Support 2: 1.2300 — major structural support from early 2025 lows
- Resistance 1: 1.2550 — broken support now acting as resistance
- Resistance 2: 1.2650 — the level GBP/USD traded at before this week’s selloff began
Technical Picture
GBP/USD has broken below its 20-day moving average and is now testing the 50-day moving average, a warning sign for bulls. The Relative Strength Index (RSI — a momentum indicator that signals overbought above 70 and oversold below 30) is approaching 35, meaning the pair is getting close to oversold territory but has not yet triggered a bounce signal. The short-term trend is clearly bearish.
What Traders Are Watching
A daily close below 1.2400 would open the door to a fast move toward 1.2300. Conversely, if GBP/USD can reclaim 1.2550 on a closing basis, it may signal the worst of the selling is over. ASX and AUD traders should note that a strong US dollar typically puts pressure on the AUD/USD and can weigh on commodity prices, including iron ore and gold — key drivers of ASX performance.
Bias
Bearish. Political uncertainty in the UK and a risk-off tone boosting the USD keep the path of least resistance lower for GBP/USD. Until 1.2550 is reclaimed, rallies are likely to be sold.
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