The GBP/USD pair is currently trending upward, trading above the mid-1.3300s. This rise is due to soft expectations from the Federal Reserve and a stabilization in risk sentiment, which affects the demand for currencies. The market expects the Bank of England (BoE) to keep interest rates steady, providing support for the British Pound. A decline in the US Dollar was partly driven by reduced tariff threats from the US President. There are also predictions of more interest rate cuts from the US central bank this year. From a technical perspective, Friday’s break through the 23.6% Fibonacci retracement level signals potential further gains, with the next target being the 38.2% Fibonacci level.

Fibonacci Levels and Support

On the downside, the 1.3330-1.3325 Fibonacci area offers short-term support. If prices drop below 1.3300, falling past the 1.3260 level could extend the downward trend to 1.3200 and possibly to the 1.3180 region. Meanwhile, the UK Pound struggles to surpass these technical levels due to negative indicators on short-term charts. Economic indicators play a vital role in the Pound Sterling’s movement. Data on GDP, manufacturing, and employment all influence its value. A positive Trade Balance raises the currency’s value by increasing demand from foreign buyers, while a negative balance diminishes it. Today, October 13, 2025, there is some buying interest in GBP/USD, but the overall situation is quite different from previous times. The difference in policy expectations between a cautious Federal Reserve and a pressured Bank of England is the main driving force now. This suggests we should be careful before expecting any long-term strength in the pound. The Bank of England is in a tougher position than the Fed, which is affecting the pound. Recent data shows UK inflation has cooled to 2.8%, but economic growth is still sluggish, with the Office for National Statistics reporting only a 0.4% growth over the past year. This is raising expectations that the BoE might need to lower interest rates in early 2026 to boost the economy.

Heading Into Speculative Territory

On the other hand, the US dollar is supported by a stronger economy. Recently, the US added 195,000 jobs, giving the Federal Reserve the ability to keep interest rates stable for a longer period. This policy difference is putting downward pressure on the GBP/USD pair, keeping it well below levels seen in previous years. Looking back to the late 2010s, the pair traded positively above the mid-1.3300s, a level that now seems like a distant target. The economic landscape driven by various global risks has shifted significantly in recent years. For derivative traders, this means adapting strategies to the new lower trading range and recognizing the UK’s economic weaknesses. Given this outlook, traders should consider strategies that protect against or profit from a potential drop in GBP/USD. Buying put options with strike prices around the 1.2000 psychological level could be a smart move in the upcoming weeks. This strategy would benefit if the pound weakens further as the market prepares for a BoE rate cut ahead of the Fed. Create your live VT Markets account and start trading now.

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