GBP/USD gaps to 1.3158 by 40 pips on letter of no confidence in PM May

GBP drops hard on the letter of no confidence in PM May.
does this attract buyers down here ahead of a busy week?

Ross J Burland FXStreet

GBP/USD opened in Sydney in a bearish gap on the back of the weekend news article from The Times that was reporting on 40 members of the PM's Conservative party signing a letter of no confidence in Theresa May's leadership.

GBP/USD: The Times' front page to weigh on GBP/USD?

GBP/USD closed at 1.3197 and opened 1.3158 and has made a low of the same level. However, as a knee-jerk reaction and opening gap, there is a tendency to pick up the opening offers and more often than not, the gap is filled.

A busy week ahead for GBP/USD

Sterling has a number positives as a backdrop in respect to the recent run of improved data and higher rates, but the market is not happy with this news and it really brings the whole Brexit and make-shift conservative party worries to the forefront and caution around bids ahead of a very busy week for cable could leave bulls on the sidelines at the start of the week. We have CPI, PPI, labour market data and retail sales all coming up in the week along with BOE's Haldane, Broadbent, Cunliffe and Gov. Carney are all speaking throughout the week as well.

GBP/USD levels

We had a recent rejection from the October high and the 50% retracement at 1.3338/43 level that is required daily closes above to alleviate the bearish bias that was put in place since the same drop.

On the flip-side,1.3180 has been broken on this gap which now opens the 1.3027 level as the recent one month low. Further below lies that 1.2995 level and the 2016-2017 uptrend line that guards the 200-DMA at 1.2854, ahead of 1.2830 as a 38.2% retracement before the 1.2575 as a 50% retracement.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD appears well offered near 1.3160

GBP/USD builds on Tuesday’s losses, although it now manages to pick up some pace and bounce off earlier multi-month troughs near 1.3140. The Greenback’s solid performance and continued political turmoil in the UK are keeping Cable under persistent pressure, with little sign of a meaningful recovery.

EUR/USD softens to near 1.1350 as Fed hike bets rise ahead of PCE inflation data

The EUR/USD pair declines to around 1.1355 during the early Asian trading hours on Thursday. The Euro weakens to its lowest level since June 2025 against the US Dollar as traders increase their bets on US interest rate hikes later this year. The US May Personal Consumption Expenditures inflation data will be the highlight on Thursday.

Gold off YTD lows, still struggles around $4,000 on hawkish Fed bets

Gold is off year-to-date lows, still struggling around $4,000 in the Asian session on Thursday as bears pause following the overnight slump to the lowest level since November 2025. Despite easing inflationary concerns amid falling oil prices, elevated Fed rate-hike bets help the US Dollar preserve its recent strong gains to the highest level since May 2025, weighing on non-yielding bullion.

Crypto market sheds over 50% of its value amid Bitcoin's brief decline below $60K

The crypto market has erased more than half of its value since reaching an all-time high in late 2025. The decline underscores the severity of the recent bear market and lack of a fresh catalyst to revive investor interest, according to a Wednesday X post by The Kobeissi Letter. The total crypto market cap peaked at a record $4.3 trillion on October 6, 2025.

5.90% to 5.45%: Why the Pound ignored the bond market’s relief rally

Keir Starmer resigned on Monday, and the Pound barely moved. That near-silence is the tell. Sterling's real driver these past four months has not been the prime minister, nor the left-leaning frontrunner lining up to replace him, but the long end of the gilt curve, which answers to a force no British politician controls.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.