Pound Sterling (GBP) may recover within the range of 1.3290 to 1.3390, but there is still a chance it could drop to 1.3200. Analysts at UOB Group believe that while downward momentum has decreased, a decline remains possible. In the past 24 hours, GBP fell to 1.3261 before sharply rising to 1.3370 in New York. It might bounce back further, but is expected to stay within the indicated range.

Possible Decline

Looking at the next one to three weeks, GBP experienced a significant drop last Friday due to stronger downward momentum. Although this momentum has lessened, the risk of falling to 1.3200 still exists unless GBP rises above 1.3410, which would make 1.3200 less likely. In related market news, EUR/USD is under pressure near 1.1550, and gold has surpassed $4,100. Factors such as US-China trade tensions and other global issues are affecting market sentiment and currency movements. Today is October 13, 2025, and the rebound in Pound Sterling appears temporary. We expect trading will remain within 1.3290 to 1.3390 in the near term. The latest UK inflation for September 2025 is at 2.9%, higher than the Bank of England’s target but not enough to encourage confident predictions of an immediate rate hike. This uncertainty contributes to a stable market outlook. We still see persistent downward pressure that could push the pound toward 1.3200 in the coming weeks. Preliminary GDP data for the third quarter shows only 0.1% growth, indicating a struggling economy that limits the central bank’s options. In this environment, strategies like bear put spreads, where you buy a put option at 1.3300 and sell one at 1.3200, can effectively manage risk while targeting a potential decline.

Market Opportunities

For traders expecting the pound to remain stagnant, the current market is well-suited for selling volatility. One-month implied volatility for GBP/USD has dipped to 7.2% from over 8.5% during September’s turmoil, making option premiums attractive for sellers. An iron condor strategy—selling a call spread above the 1.3410 resistance and a put spread below the 1.3290 support—could yield profits by collecting premiums over time. The key level to watch is 1.3410, seen as strong resistance. A decisive move above this level would indicate a full reversal of downward momentum and could trigger a fast exit from short positions. Such a move would likely require a significant catalyst, like a major improvement in global risk sentiment or a surprising hawkish shift from the Bank of England. Create your live VT Markets account and start trading now.

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