Pound Sterling (GBP) is predicted to trade between 1.3295 and 1.3360. To show a lasting decline, it needs to close below 1.3295, according to UOB Group’s FX analysts. Last Thursday, the GBP fell to 1.3309. Analysts observed some downward momentum but noted it was limited. They expected a test of the 1.3295 level, but a significant drop seemed unlikely. The GBP moved between 1.3289 and 1.3385, closing at 1.3318. Current trends suggest it will keep trading in the range of 1.3295 to 1.3360.

Analysis Of Recent Week

Last week, there was a slight increase in the GBP’s downward momentum. It was expected to drift lower within the range of 1.3310 to 1.3435. By Friday, the momentum increased a bit more, but a drop below 1.3295 is necessary for further decline. The GBP reached 1.3385 but then fell to 1.3289, closing at 1.3318. Since the resistance level wasn’t clearly broken, analysts hold onto their view. We believe the GBP/USD will trade sideways in the upcoming weeks. The price movements are unclear, indicating a likely range between 1.3295 and 1.3360. Without fresh news, major movements are not expected. This perspective is backed by recent economic data. The latest UK inflation rate was 2.9%, slightly above the Bank of England’s target. However, officials seem content with keeping rates steady for now. In the US, last week’s retail sales data was decent but not strong enough to push the Federal Reserve into a more assertive position, maintaining stability in the currency pair.

Trading Strategies And Considerations

For derivative traders, the current consolidation suggests that implied volatility may be overvalued. This environment presents an opportunity to sell premium as long as the pair stays within this defined range. Strategies like short strangles or iron condors could be profitable if the market remains stable. Specifically, we could sell call options with a strike price above the strong resistance level of 1.3385. At the same time, selling put options with a strike below the important support of 1.3295 would help create a position that benefits from expected sideways movement. This strategy could be profitable as time passes, as long as there’s no unexpected breakout. However, we need to keep a close eye on the 1.3295 level. A sustained daily close below this support would indicate a resumption of the bearish trend, invalidating our range-bound outlook. In this case, we would need to close our short positions and possibly buy puts to take advantage of a potential drop towards the 1.3200 area, which we haven’t seen since August 2025. This period of low volatility reminds us of the quiet conditions seen in the second quarter of 2024. That calm was followed by a sharp breakout when central bank guidance changed. While we are currently positioned for a range, we are also setting alerts for breaches of the key levels. Create your live VT Markets account and start trading now.

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