British pound slides as deepening UK political tensions weigh on sentiment

Cable dropped around 0.8% on Tuesday as the political crisis in the UK deepened, after several lawmakers called on Prime Minister Keir Starmer to resign following heavy losses suffered by the Labour Party in the latest local elections.

Sterling weakened alongside UK equities, while long-dated British borrowing costs climbed to their highest levels in more than three decades, reflecting growing investor concerns over a possible leadership change and rising political instability.

Although Starmer rejected calls to step down during Tuesday’s cabinet meeting and insisted he would continue governing, the pound is likely to remain under pressure amid increasing political uncertainty and mounting fears of a deeper economic slowdown as the global economy absorbs the full impact of the US–Iran conflict.

Technical studies on the daily chart weakened further on Tuesday, though the broader structure remains constructive despite the latest pullback.

Fresh bearish attempts encountered initial support at the top of the daily Ichimoku cloud near 1.3514. However, the cloud continues to narrow and is approaching a bearish twist in the coming two weeks, which could attract additional downside pressure.

A sustained break below the cloud would generate an initial bearish signal, with focus shifting to key supports at 1.3467/50 — the 38.2% Fibonacci retracement of the 1.3159/1.3657 rally and the late-April higher base. A break below this zone would confirm a stronger reversal signal and expose the pair to deeper losses.

Daily indicators have turned lower, although they still remain in positive territory, while a cluster of converging moving averages around the 1.3480/20 area (100DMA, 55DMA and 200DMA) continues to provide significant support within the broader bullish setup.

Res: 1.3555; 1.3614; 1.3658; 1.3700
Sup: 1.3514; 1.3480; 1.3450; 1.3420