Sterling Defies UK Political Turmoil as GBP/USD Tests Key Support

Sterling has remained surprisingly resilient despite growing political turmoil in the UK and rising gilt yields, showing that weak USD sentiment and broader risk appetite are still the main drivers in GBP/USD. More than 100 Labour MPs are now calling for Prime Minister Keir Starmer to step down, increasing concerns about fiscal and political uncertainty, especially if Labour shifts toward a more left-leaning direction.

At the same time, stronger-than-expected US inflation data and rising oil prices have failed to generate lasting USD strength, even as markets begin pricing in the possibility of further Fed tightening. Traders remain reluctant to aggressively buy the dollar despite higher crude prices and geopolitical tensions linked to the US-Iran situation.

Technically, GBP/USD is still trading inside a rising wedge pattern, which often warns of a potential downside break. Support near the lower wedge boundary remains critical. A confirmed break lower could expose levels around 1.3450, and potentially 1.3180, while resistance near the top of the wedge sits around 1.3650. Momentum indicators are also starting to weaken, suggesting sterling’s recent rally may be losing strength.

GBP/USD Daily Chart