Pound Sterling (GBP) is nearing an important resistance level at 1.3620. There are cautious hopes that it might break through and stay above this level. Although there is a positive long-term outlook, the chance of hitting 1.3660 is currently low. Recently, GBP climbed to 1.3523, exceeding expectations by moving past 1.3555 and peaking at 1.3585. This strong upward trend indicates a possible test of 1.3620. To keep this momentum, GBP needs to stay above 1.3530, which provides minor support at 1.3555.

Current Upward Momentum

In the last one to three weeks, GBP has shown steady upward movement, starting from 1.3445. Although the rise past 1.3515 didn’t show much momentum, GBP still advanced to 1.3585. The outlook is still positive, with a chance to reach 1.3620, but surpassing 1.3660 seems unlikely. If it drops below 1.3485, it may indicate a loss of momentum. Keep in mind that financial forecasting always carries risks and uncertainties. It’s essential to verify this information and understand the risks involved before making investment decisions, as losses or emotional stress can occur. The pound sterling is pressing against the 1.3620 resistance level, calling for a careful strategy. For those feeling cautiously optimistic, a bull call spread could be a sensible choice. This tactic allows you to profit from a modest increase while minimizing risk if the momentum slows down. The recent strength of the pound is supported by key data. For July 2025, UK inflation was reported at 2.3%, slightly above the expected 2.1%, supporting a strong monetary policy from the Bank of England. Additionally, last week’s weaker-than-expected US jobs report is putting pressure on the dollar, which helps the GBP/USD exchange rate.

Strategic Responses and Historical Context

If you’re holding long positions, it’s wise to manage your risk by identifying key levels. Setting a stop-loss order below the 1.3530 support level is a smart move to protect against sudden drops. If GBP falls below 1.3485, that would suggest the upward momentum has likely fizzled out. It’s helpful to recall the history of this price range as of August 2025. In early 2022, the 1.3600 to 1.3700 range was a strong ceiling for the pound before a major decline. This history indicates that breaking through will require significant force. Alternatively, traders who think the 1.3620 resistance might hold firm could consider a bear call spread. This strategy involves selling a call option at or just above that level, which would be profitable if the pound can’t break through. This aligns with the view that reaching 1.3660 is unlikely. Create your live VT Markets account and start trading now.

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