Pound Sterling (GBP) might reach the 1.3475 level, but it’s unlikely to move much higher. If GBP clearly goes above 1.3475, it could go up to 1.3505 and possibly 1.3530, say analysts from UOB Group. Recently, GBP increased to 1.3408 and peaked at 1.3455, but there’s not much strong upward movement. Key support levels are at 1.3420 and 1.3400, while major resistance levels at 1.3475 and 1.3500 are expected to hold firm.

GBP Market Analysis

Analysts note that the downward momentum for GBP is slowing. This puts GBP in a range of 1.3320 to 1.3475 in the short term. If GBP stays above the support level of 1.3360, it has a better chance of breaking through 1.3475 soon. This analysis reflects trends in global currency markets amid various economic challenges and expectations. The FXStreet Insights Team provides market trend insights, offering detailed analysis on currency movements and related topics. Other currencies are also showing changes. USD/CHF is facing losses, and gold prices have dropped below $4,300 after recent highs. This drop is linked to a stronger US Dollar and changes in Treasury yields.

Economic Data and Currency Movement

The Pound shows potential for growth as it approaches the 1.3475 level. A strong break above this resistance may lead to further increases towards 1.3505 and even 1.3530. It’s important to watch the support level at 1.3360 for any dips. This positive outlook for Sterling is supported by new economic data. Recent inflation numbers revealed that UK CPI unexpectedly rose to 2.9% in September, reducing the Bank of England’s urgency to cut interest rates, which were previously anticipated. This makes the Pound a more appealing choice compared to other currencies. In contrast, the US dollar is weakening due to signs of an economic slowdown. The non-farm payroll report for early October showed only a 150,000 job increase, which reinforces the belief that the Federal Reserve will keep rates unchanged in the next meeting. This is a stark difference from the Fed’s aggressive approach throughout much of 2024. Given this perspective, considering a breakout strategy using derivatives seems wise. Buying short-term call options with a strike price of 1.3500 or higher could offer good upside potential if GBP breaks the 1.3475 resistance soon. The low implied volatility, around 8.5% this month, makes this an affordable way to take advantage of the possible move. To manage risks, we’re keeping an eye on the 1.3360 support level. A break below this could change the bullish outlook. Traders might think about purchasing put options with a strike price below 1.3400 as a safeguard against a sudden market downturn. Create your live VT Markets account and start trading now.

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