The GBP/USD is trading around 1.3120, but it’s unlikely to fall to the important support level of 1.3100. While the market is currently negative for GBP, it appears oversold, suggesting limited further weakening before a possible recovery. Analysts note that GBP has seen significant swings lately. Even though it dropped to 1.3117, it’s uncertain if it will hit the 1.3100 target. If it breaks above 1.3200, the downward trend could reverse.

Market Pressure Continues

The GBP/USD has faced pressure for more than a week. Predictions remain negative below the 1.3245 resistance level. If the pound stays under this range, the negative view holds, but conditions are still oversold in the short term. The FXStreet Insights Team includes journalists who share market observations, but this is not investment advice. Analyses reflect views from various analysts and emphasize the importance of thorough research before making decisions. Articles do not guarantee accuracy and recognize that investing carries potential risks and losses. Readers can subscribe to the FXStreet Orange Juice Newsletter for daily expert insights. Given the current weakness of the Pound, the 1.3100 level acts as a crucial psychological and technical support. Since the market is deeply oversold after recently hitting 1.3117, a significant drop through this support seems unlikely in the short term. Traders might see a retest of 1.3120, but a major decline may not happen right now.

Opportunities and Strategies

This technical situation suggests that selling put options with a strike price at or below 1.3100 could be a smart strategy for the next few weeks. Recent data from late October 2025 shows that speculative net short positions on the Pound are at their highest in six months, meaning much of the negative sentiment is likely already priced in. A heavily short market is more likely to reverse, making a significant support breach less probable. Alternatively, the oversold conditions create an opportunity for a rebound, especially since the US Federal Reserve indicated a pause in its tightening cycle earlier this month. Traders could position for recovery by buying call options or setting up bull call spreads, expecting a move back toward resistance. This view is supported by recent minutes from the Bank of England, suggesting that rate cuts aren’t likely despite slower growth. For those who think the overall negative trend will continue, the 1.3245 level is now a crucial barrier. Selling call spreads with strike prices above this resistance can effectively capitalize on fading upward momentum. This strategy allows maintaining a bearish outlook while limiting risk in case of an unexpectedly strong rebound. In the past, similar price movements occurred in autumn 2023, where a sharp drop in GBP/USD was followed by a period of stable trading. If implied volatility remains high from the recent sell-off, strategies like an iron condor could be beneficial. This method profits from the price remaining between the 1.3100 support and the 1.3245 resistance, allowing traders to take advantage of price consolidation rather than predicting a specific direction. Create your live VT Markets account and start trading now.

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