The Pound Sterling (GBP) is struggling, dipping 0.1% against the US Dollar (USD). Although it had a brief rise in the upper 1.33 range during Asian trading, it couldn’t hold onto those gains. There hasn’t been any significant news driving the GBP’s drop. The EURGBP’s rise past the late September high of around 0.8750 may have added pressure on the pound, as it approaches the July high of 0.8770.

Technical Outlook for GBP

The GBP’s recent performance influences its short-term technical outlook, highlighting resistance at 1.3370. The low point on Friday, 1.3288, is a crucial support level. If it falls below this level, further losses may occur. FXStreet offers market insights but does not recommend specific investment actions. The information is for educational purposes and includes forward-looking statements. Readers should do their own research and take responsibility for any investment risks or losses. FXStreet emphasizes the need for thorough personal investigation before making investment decisions. The opinions shared in this article are those of the authors and do not reflect FXStreet’s official view. Neither FXStreet nor the authors provide personalized advice or guarantee the accuracy of the information given.

Investment Strategies Against the Pound

The Pound is having a tough time against the Dollar, unable to stay above the 1.3370 level. This indicates that buying put options with a strike price below the important 1.3288 support could be a smart strategy. If the GBP/USD pair drops decisively below this point, it may speed up losses. This downward trend in the Pound is expected, especially after recent UK economic data. Last week’s figures showed a mere 0.1% growth in third-quarter GDP, raising concerns that the Bank of England may need to adopt a more dovish approach. This contrasts sharply with the economic situation in 2024, when inflation was the main focus. Although the Federal Reserve is also likely to lower its rates, the market seems to foresee a more severe economic slowdown in the UK. The continued strength of the EUR/GBP, which is testing July highs near 0.8770, indicates specific weakness in the Sterling. We can compare this to the post-Brexit volatility of the late 2010s when the Pound lagged behind its peers. In the upcoming weeks, it makes sense to consider short positions on GBP/USD futures, especially if the 1.3288 level is broken. Alternatively, buying put options expiring in December offers a defined-risk way to profit from potential further declines. The implied volatility for one-month options has increased to 9.2% recently, signaling the market’s expectation of a significant shift. Create your live VT Markets account and start trading now.

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