Pound Sterling (GBP) is stable in the upper 1.35s after the recent UK data releases. The GDP figures for June and the second quarter exceeded expectations, showing increases of +0.4% and +0.3%, indicating stronger activity in manufacturing and services. In the first half of the year, the UK economy led the G7 with a growth of 1.1%, nearly doubling the US’s 0.6% growth. This has slightly lowered expectations for interest rate cuts from the Bank of England for the rest of the year.

Sterling’s Strong Position

Sterling is holding steady, nearing the resistance level at 1.3590. The upward trend since the August 1 low is supported by positive momentum on the 6-hour chart. If it breaks through 1.3590, it could target gains at 1.3635/45 and the July 1 high of 1.3790, with support at 1.3530/40. This information contains forward-looking statements that come with risks and uncertainties. Readers assume all risks, losses, and costs associated with investing, including potential total principal loss. The author has no stock positions or business relationships related to this content. Pound Sterling is maintaining its strength due to better-than-expected performance from the UK economy. The recent GDP data for June and the second quarter revealed a surprising resilience, leading the G7 in growth and challenging expectations of a slowdown. This newfound strength makes it unlikely that the Bank of England will lower interest rates soon. Supporting this view are the inflation figures from July 2025, which show the Consumer Price Index stuck at 2.3%, above the Bank’s 2% target. This is a notable shift from the economic worries seen in 2023 and 2024. The Bank has emphasized its data-driven approach, and current data does not justify any easing of policy.

Economic Differences

Conversely, recent US data, including a weaker jobs report for July 2025, indicates that their economy may be slowing more quickly. This growing disparity between UK and US economic trends creates a positive environment for Sterling against the dollar. This contrasts sharply with early 2024 when the Federal Reserve appeared more aggressive. Given this scenario, there are bullish opportunities for GBP derivatives in the coming weeks. We are looking for a sustained break above the 1.3590 resistance level, which may lead to a move towards 1.3790. Buying GBP/USD call options with strike prices around 1.3650 for September or October seems like a solid plan to capitalize on this potential upside. Of course, managing risk is crucial if the momentum wanes. The 1.3530/40 level now serves as critical support; if it drops below this, it would signal a weakening bullish trend. Traders might consider using this level for stop-loss triggers or buying protective put options to safeguard their long positions. Create your live VT Markets account and start trading now.

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