GBP/USD crashes to 1.3300 as risk-off sentiment drives Greenback gains

• GBP/USD crashed into the 1.3300 handle on Thursday.
• Risk-off sentiment is bolstering the safe haven US Dollar.
• The ongoing US government shutdown is beginning to shake out markets.

GBP/USD accelerated into the bearish side on Thursday, falling nearly eight-tenths of one percent and sending Cable bids into the 1.3300 handle for the first time since early August. Broad-market investor sentiment is beginning to crumble amid the ongoing US government shutdown, which shows no signs of slowing.

The US government's ongoing shutdown has officially extended past the one-week mark, reaching its ninth day on Thursday. Investors initially showed little to no reaction to the shuttering of federal services, but market apprehension is slowly on the rise as the US Senate shows no signs of progress. Senate Republicans have rejected multiple budget bridging proposals from Democrats, as the two sides of the US government vote down party lines.

The government shutdown has also clamped down on the release of official datasets, leaving markets to grapple with newly added emphasis on private datasets. This week's key release will be the University of Michigan's (UoM) Consumer Sentiment Index for October, slated for Friday. Aggregated consumer survey results are expected to ease slightly as ongoing trade war headlines and rising inflation pressures eat away at consumer confidence.

GBP/USD price forecast

GBP/USD extended its decline this week, breaking beneath recent consolidation near 1.3400 and now testing the 200-day Exponential Moving Average (EMA) around 1.3280. The pair has been under steady selling pressure as the dollar regained strength, and the daily close below the 50-day EMA at 1.3467 confirms a shift in short-term momentum toward the bears.

From a price action standpoint, sellers have taken control after a failed attempt to reclaim mid-September highs. The long-bodied red candles reflect strong participation from the downside, while the Relative Strength Index (RSI) at 36 suggests growing bearish momentum but not yet oversold conditions. The 200-day EMA now serves as the last major technical support before the summer lows near 1.3140. If buyers fail to defend this level, the broader uptrend from early August could give way to a deeper retracement phase.

GBP/USD daily chart