The British Pound rose on Monday as traders reacted to concerns about the independence of the US Federal Reserve. The GBP/USD is at 1.3473, up 0.55%, as the US Dollar weakens due to a ‘Sell America’ trend linked to geopolitical events. During the European session, GBP/USD made a strong comeback to 1.3465 from an opening of 1.3390, fueled by the softening US Dollar. Worries increased when a criminal investigation started against Federal Reserve Chair Jerome Powell, attracting buyers to around 1.3430.

Immediate Resistance and Market Dynamics

Immediate resistance for GBP/USD is noted above 1.3450, especially after reports that US President Donald Trump threatened Jerome Powell with criminal charges. This led to a further decline in the US Dollar against the Pound Sterling, shifting market dynamics. In related movements, GBP/JPY climbed to 213.00, and gold hit a record $4,600 amid uncertainty. Other currencies like AUD/USD and NZD/USD also rose as the US Dollar weakened under similar concerns. These developments highlight the volatility in currency trading. This situation shows a typical ‘Sell America’ trend due to political issues surrounding the Federal Reserve. Market volatility has surged, with the Cboe Volatility Index (VIX) rising over 45% last week, closing above 35. Traders should consider buying options to benefit from the expected price swings in the near future.

Profiting from Market Volatility

For the GBP/USD pair, now approaching 1.3500, buying call options could be a good strategy. Strike prices of 1.36 or higher for February 2026 expiration could effectively capitalize on the continued weakness of the US Dollar. This strategy is appealing, as UK inflation stayed steady at 2.1% in Q4 2025, making the Pound’s strength primarily about dollar weakness. This crisis is pushing investors towards safe havens, which is why gold has broken through the $4,600 per ounce mark. Long positions in gold and silver futures could be advantageous to take advantage of this momentum. It’s also a crucial moment to protect existing US stock portfolios by purchasing put options on major indices like the S&P 500. Looking back, this situation feels worse than the 2011 US debt ceiling crisis, which also led to a dollar decline and a surge in gold prices. Recent data shows that a record $50 billion left U.S. funds in the first week of January alone. It’s wise to plan trades to last several weeks, as this political uncertainty likely won’t resolve quickly. Create your live VT Markets account and start trading now.

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