The British pound faces mounting pressure from domestic political instability and rising US rate expectations, leaving GBP/USD vulnerable to a major technical breakdown.
Key takeaways
- GBP/USD has fallen to a three-month low as UK political uncertainty and a stronger US dollar weigh on sterling.
- Bearish momentum remains intact with GBP/USD trading below its 200-day moving average and within a descending channel.
- A break below 1.3160 may trigger a deeper decline toward 1.3100 and 1.3044, while 1.3325 remains key resistance.
- The British pound is now facing multiple headwinds, including a more hawkish monetary policy stance by the US Federal Reserve and internal UK political instability within the ruling Labour Party.
The current UK Prime Minister, Keir Starmer, is now facing an imminent threat of resignation after a revolt among several Labour Party MPs following a thumping defeat in the recent local elections.
Allies of Keir Starmer expect him to set out a timetable for his departure as UK prime minister imminently and open the door for rival Andy Burnham to replace him. In addition, an official statement from Starmer ceding power may come as soon as Monday, 22 June 2026.
The British pound has extended its losses by 0.2% against the US dollar in today’s Asian session, trading at an intraday level of 1.3205 per USD at the time of writing, following last week’s steep 1.3% loss against the greenback.
Now, let’s focus on the medium-term technical chart of the GBP/USD.
Looking vulnerable for a potential major bearish breakdown below 1.3160
Fig. 1: GBP/USD medium-term trend as of 22 Jun 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
Last week’s weakness has led GBP/USD to plummet to a 3-month low and retest the long-term secular ascending channel support at 1.3160, in place since the 26 September 2022 low (an intraday low of 1.3163 was printed on 19 June 2026) (see Fig. 1).
The 4-hour RSI momentum indicator has continued to show bearish momentum after a bearish reaction at its pullback resistance at the 36 level. Also, GBP/USD continues to trade below the key 200-day moving average and oscillate within a medium-term descending channel since the 11 May 2026 high of 1.3654.
Watch the 1.3325 key medium-term pivotal resistance, and a break below 1.3160 may reinforce a potential medium-term downtrend phase to expose the next medium-term supports at 1.3100 and 1.3044/3010 (also a Fibonacci extension).
On the other hand, a clearance and a daily close above 1.3325 invalidate the bearish tone, opening scope for the next medium-term resistances at 1.3385 (also close to the 20-day and 200-day moving averages) and 1.3460 (also the 50-day moving average).
This article and its contents are intended for educational purposes only and should not be considered trading advice.
