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Published: 23 June 2026,08:21
Daily Market Analysis New
*The British Pound gained support after Prime Minister Keir Starmer announced his resignation, with markets welcoming the prospect of new leadership and potential policy adjustments.
*Latest UK PMI data showed modest economic expansion, driven by resilient services activity despite ongoing weakness in manufacturing caused by elevated costs and supply chain challenges.
*Sterling could remain supported if the leadership transition proceeds smoothly and investor confidence improves. However, traders should remain alert to political developments and global geopolitical risks.
The Pound Sterling strengthened in today’s session following the announcement of Prime Minister Keir Starmer’s resignation. Starmer stepped down as Labour Party leader and Prime Minister on June 22, citing internal party pressures and acknowledging he was not best positioned to lead into the next general election. He will remain as caretaker until a new leader is selected, likely by early September. Markets have responded positively to the prospect of fresh leadership, with Andy Burnham, the former Mayor of Greater Manchester, emerging as the strong frontrunner after securing key endorsements.
This political shift has been interpreted as a potential catalyst for policy reset amid ongoing economic challenges, boosting risk appetite toward sterling assets. GBP/USD rebounded from earlier lows, reflecting optimism around a smoother transition and possible fiscal or growth-oriented adjustments under new leadership.
Today’s flash UK PMI readings provide additional context on economic momentum. The data offered a mixed but stabilizing picture, with the composite PMI showing modest expansion amid services resilience, though manufacturing continued to face headwinds from elevated input costs and geopolitical supply disruptions. The figures help underscore the need for steady monetary policy from the Bank of England while highlighting areas where new leadership could focus reforms.
The near-term outlook for the pound is cautiously optimistic. The leadership change introduces short-term uncertainty around fiscal policy and gilt issuance, but a clean transition could support further GBP gains if it signals stability. Traders will monitor Burnham’s emerging platform and upcoming economic releases. Support for GBP/USD lies near recent lows, with upside potential tied to positive sentiment around the political handover. Volatility remains elevated given broader global factors including geopolitics and U.S. policy developments.
Technical Analysis
EUR/GBP previously exhibited strong bullish momentum after breaking above its lower-high price structure, signaling a bullish trend reversal and attracting renewed buying interest. The breakout suggested that the pair had successfully shifted away from its previous bearish trajectory and was attempting to establish a more constructive trend.
However, the bullish advance encountered significant resistance near the 0.8678 level. Following the rejection from this key resistance zone, EUR/GBP experienced a sharp pullback, erasing a portion of its recent gains and bringing the pair back toward the critical support area around 0.8620.
The 0.8620 level now serves as a pivotal support zone and is likely to determine the pair’s next directional move. Given its technical significance, buyers are expected to defend this area in an attempt to preserve the broader recovery structure. As long as EUR/GBP remains supported above this level, the possibility of a rebound remains intact.
Should the pair successfully hold above 0.8620, a recovery toward higher resistance levels could emerge, helping to reinforce the longer-term bullish outlook that developed following the earlier breakout. On the other hand, a decisive break below the 0.8620 support level would be a notable bearish development. Such a move would invalidate the recent recovery structure, signal a deterioration in market sentiment, and potentially trigger a more substantial decline.
Resistance Levels: 0.8651, 0.8678
Support Levels: 0.8620, 0.8587
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