Resistance Levels and Trends

The GBP may try to reach 1.3475, but it looks unlikely to go higher without breaking this barrier first. Analysts believe that if GBP does exceed 1.3475, it could climb to 1.3505 and possibly test 1.3530. Recently, the GBP hit a high of 1.3455, just below the key resistance level of 1.3475. Analysts expected a test of 1.3445, but they didn’t anticipate reaching the 1.3475 mark. The Pound Sterling is weakening against the US Dollar, showing a trend we’ve seen before. Many expect the Bank of England to lower interest rates soon, which is putting more pressure on the currency. As of today, October 17, 2025, GBP/USD is around 1.2450, down significantly from previous years. This concern grew after the latest inflation report for September 2025, which showed the Consumer Price Index (CPI) falling to 2.1%. While this is close to the Bank of England’s target, the drop from 3.5% earlier this year indicates that economic activity is slowing more than expected. This situation is similar to late 2023, when weak labor data also led to increased expectations for rate cuts.

Market Reactions and Expectations

Looking back, price levels like 1.3475 seem far away, as the Pound has struggled to recover since the sharp declines of 2022. The market is now anticipating at least one 25-basis-point rate cut from the Bank of England before the second quarter of 2026, creating noticeable downward pressure. For derivative traders, implied volatility is rising, with the one-month measure for GBP/USD now at 9.8%, up from 8.2% last month. This scenario makes buying put options appealing for those betting on further declines toward the 1.2300 support level. Alternatively, traders can consider a bear put spread to reduce costs and define risk. On the other hand, the US economy appears stronger, with recent retail sales data indicating stable consumer behavior. This policy divergence—where the Federal Reserve is expected to maintain rates while the Bank of England looks to cut—adds more pressure on the Pound. Historically, sharp differences in central bank policies lead to strong trends. Create your live VT Markets account and start trading now.

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