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    Pound Sterling remains strong near 1.3470 against the US Dollar ahead of CPI data

    by VT Markets
    /
    Jan 13, 2026

    GBP/USD Range Trading Phase

    UOB Group’s FX analysts, Quek Ser Leang and Peter Chia, believe that GBP/USD is currently in a range-trading phase. They see a chance for the price to bounce back and test 1.3495 before pulling back. However, they do not expect it to challenge 1.3520 soon. Last Friday, GBP fell to 1.3393, but analysts think it won’t drop below the strong support level of 1.3370. Instead, it quickly bounced back, reaching a peak of 1.3486. The Pound remains strong against the Dollar as the market waits for the US CPI data, which may impact future market trends and Federal Reserve decisions. Currently, the Pound is steady around 1.3470 against the Dollar, just before the important US CPI data release. With the Federal Reserve focusing on risks in the labor market, this inflation report might not lead to an immediate change in their approach. The solid December 2025 Non-Farm Payrolls report, which added 210,000 jobs, suggests the Fed prefers to see how the economy adjusts to last year’s monetary tightening. Looking ahead, we can expect a range-bound market. This makes it tough for straightforward bets. It’s wise to consider strategies like selling short-dated options strangles outside the predicted range of 1.3370 to 1.3520. This allows us to make a profit as the pair stays within these important technical levels.

    US CPI Impact on Market Strategies

    We need to keep an eye on potential surprises in the US CPI, which is anticipated to be around 3.1% year-over-year. If the number is much higher, it could push the Fed to change its patient stance and lead to a quick break in the recent range that formed in late 2025. Buying inexpensive, out-of-the-money call options on the pair might be a smart way to protect against sudden volatility. On the Sterling side, UK inflation remains a concern, with the latest December 2025 reading at a stubborn 4.2%. This gap in inflation rates might keep the Bank of England on a more aggressive path compared to the Fed. This underlying tension supports the idea of a contained but uneasy trading range for GBP/USD in the near future. Create your live VT Markets account and start trading now.

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