Pound Sterling (GBP) is expected to trade between 1.3385 and 1.3435. If it goes above 1.3475, it might advance to 1.3505 and could even reach 1.3530. In the past 24 hours, GBP moved between 1.3400 and 1.3442, closing at 1.3404, which is a drop of 0.26%. Current signals suggest it will stay within the 1.3385 to 1.3435 range.

Longer Term Observations

Long-term trends show that even with a slowdown, GBP might break above 1.3475 if it holds above the strong support at 1.3360. The outlook remains positive for potential growth. This analysis is put together by the FXStreet Insights Team, featuring insights from various market experts and researchers. The Pound is currently trading sideways, likely remaining between 1.3385 and 1.3435. This scenario suggests that short-term strategies betting on low volatility could be worthwhile. However, the general sentiment remains strong, pointing to a possible rise in the upcoming weeks.

If We See A Sustained Break Above

If GBP breaks above 1.3475 and holds, we expect a rally towards 1.3505. Recent UK inflation data last week, at 3.1%, supports the Bank of England’s strong position and reinforces this expectation. Hence, buying call options with a strike price around 1.3500 could be beneficial if that level is exceeded. Conversely, keep an eye on the strong support at 1.3360. If it falls below this, our positive outlook will be invalidated, which might indicate further weakness. Traders could consider buying puts below this level as protection, especially since the recent US jobs report from early October 2025 showed a slight slowdown in hiring, which may bring dollar volatility. The current tight range has kept short-term volatility low, but the chance of a breakout suggests this may soon change. The one-month implied volatility for GBP/USD is already up to 8.2% this week, indicating the market anticipates a significant move. A long straddle strategy, which involves buying both call and put options, could effectively capture any sharp movement. This price action reminds us of the consolidation phase we experienced in the summer of 2024, which led to a major trend. Back then, the pair traded in a narrow range for several weeks before breaking out. Once again, patience is required, but we should be ready for the range to result in a significant move. Create your live VT Markets account and start trading now.

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