- News of potential ministerial resignations exerts some pressure in the last hour.
- Tempered Fed rate cut bets underpins the USD and added to the selling bias.
The GBP/USD pair finally broke down of its Asian session consolidation phase and dropped to fresh session lows, around the 1.2475 region in the last hour.
The latest leg of a sudden drop of over 35-pips, dragging the pair farther below the key 1.2500 psychological mark came in reaction to the UK political headlines, suggesting that the ministerial resignations could begin later this Monday.
It is worth reporting that UK chancellor of the exchequers Phillip Hammond, along with the Secretary of State for Justice and Lord Chancellor David Guake stand ready to resign if Boris Johnson - the frontrunner, becomes the next British PM.
On the other hand, the US Dollar remains supported by St. Louis Fed President James Bullard's comments on Friday, saying that a 25 bps rate cut seems appropriate as the current US economic condition doesn't warrant a larger cut.
The downside, however, remained limited, at least for the time being, as investors still seemed reluctant to place any aggressive bets ahead of the Tory leadership voting results, expected to be announced on Tuesday, and absent relevant economic data.
Hence, it would be prudent to wait for a strong follow-through selling before traders start positioning for the resumption of the pair's well-established bearish trend and a possible move back towards challenging 27-month lows set last Wednesday.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds losses near 0.6450 amid Australian politics; RBA eyed
AUD/USD keeps the red near 0.6450 in the Asian session on Tuesday as traders opt to wait for the RBA decision before placing fresh directional bets. A modest US Dollar uptick and Australian political drama undermine the Aussie even as the PBOC delivered the expected 10 bps Loan Prime Rate cuts.
USD/JPY drops back below 145.00 on likely Japan-US FX talks
USD/JPY has come under intense selling pressure and gives up 145.00 in the Asian session on Tuesday. The pair fades the upswing after Japan's Finance Minister Kato hinted at holding FX talks with US Treasury Secretary Bessent, which lifted the Japanese Yen.
Gold price struggle with $3,250 extends, what’s next?
Gold price has returned to red early Tuesday, having failed to take out the $3,250 barrier once again. The downtick in Gold price could be linked to a tepid US Dollar recovery as traders await US trade talks and Fedspeak for a fresh directional impetus.
Solana set for a consensus switch with the introduction of Alpenglow
Solana (SOL) showed signs of recovery in the American trading session on Monday following the introduction of a new consensus protocol, Alpenglow, which would replace the network's current Proof-of-History and TowerBFT mechanisms.
China April slowdown shows the impact of economic uncertainty
Trade war uncertainty is denting Chinese confidence, resulting in slower economic activity in April. Retail sales and fixed-asset investment both underperformed forecasts amid heightened caution. Yet the impact on manufacturing was less than feared.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.