- May 18, 2026
- Posted by: EWGFX
- Category: news
The GBP/USD pair trades lower near 1.3300 in the early European trade at the start of the week, the lowest level seen in over five weeks. The Cable is down as the British Pound faces broader selling pressure due to the combined effects of United Kingdom (UK) political uncertainty, rising gilt yields, and geopolitical tensions.
UK Prime Minister (PM) Keir Starmer faces a leadership challenge from Greater Manchester Mayor Andy Burnham after the defeat of the Labour Party in regional elections.
Concerns over UK PM Starmer’s leadership stemmed after resignations from various ministers. According to analysts at Jefferies, their base case is “one of a managed exit for Starmer and Burnham likely becoming the next PM”.
Fears of a UK leadership change have prompted gilt yields, in hopes that the new leadership would follow a loose fiscal policy. As of writing, 10-year yields on UK government bonds are up almost 3% to near 5.19%, the highest level seen since the sub-prime crisis.
Meanwhile, tensions between the United States (US) and Iran have renewed as President Donald Trump has warned of serious consequences against Tehran, through a post on Truth Social, if it doesn’t reach a deal soon.
GBP/USD trades lower at around 1.3300 as of writing. The pair keeps a bearish near-term tone as it holds below the 20-day Exponential Moving Average (EMA) at 1.3483 after losing its prior uptrend structure.
The Relative Strength Index (RSI) at 36.8 sits just above oversold territory, hinting that while downside pressure persists, the immediate selling impulse is no longer extreme.
On the downside, the next notable support is the former rising trend-line area around 1.3213, where buyers may attempt to slow the decline. A downside move below the upward-sloping trendline would expose the pair towards 1.3100.
Looking up, initial resistance is reinforced by the 20-day EMA at 1.3483, and only a daily close back above this barrier would start to ease the current bearish bias.