The Pound Sterling is rising strongly against major currencies, reaching about 1.3536 against the US Dollar. This follows positive economic news from the UK, including a higher-than-expected S&P Global Purchasing Managers’ Index for January and increased Retail Sales in December. The Pound has potential for further growth, but it’s unclear if it can break through the key level of 1.3570. The UK’s Composite PMI rose to 53.9 in January from 51.4 in December, surpassing the estimate of 51.7. This shows solid growth in both manufacturing and services.

Pound Sterling Momentum and Market Movements

The GBP/USD pair might climb to a four-month high close to 1.3600, fueled by stronger sales of the US Dollar. Notable market movements include gold nearing $5,000 due to demand for safe-haven assets and a weaker US Dollar, as well as Bitcoin’s value swinging with global events and trends. Legal disclaimers remind us that predictions carry risks and uncertainties. Market data is informational only and should not be seen as investment advice. It’s important to conduct thorough research before making any investment choices. FXStreet does not guarantee accuracy or timeliness of information, and investing carries substantial risk. The Pound shows strength against the Dollar due to unexpectedly strong UK retail sales and business activity data. We see the GBP/USD pair nearing 1.3536, but there is important resistance at 1.3570. The key issue in the coming weeks is whether this momentum can break through that level. For traders who think this rally may slow down, selling call options above 1.3570 might be smart. This strategy allows us to earn a premium, betting that the pair will stay below this resistance level. Strong economic data adds support, making a sharp drop less likely and favoring a stable range.

Investment Strategies and Considerations

Looking back, UK inflation was stubbornly above the Bank of England’s target in the last quarter of 2025, sitting around 3.9%. While the central bank is likely to keep interest rates unchanged, this ongoing inflation may already be reflected in the currency’s value. This suggests that big gains could be hard to come by going forward. For those who believe the positive economic outlook will continue, a bull call spread can provide a low-risk way to bet on minor gains. By buying a call option just below the current price and selling another above 1.3600, we stand to gain from a rise. This approach minimizes our upfront costs and potential losses if the rally unexpectedly reverses. We should also be cautious about a possible reversal, as the Dollar has been weak for a while. The latest US jobs report from December 2025 showed over 200,000 new jobs, indicating strength in their economy. Buying put options could be a useful hedge against a sudden rebound in the Dollar if upcoming US inflation data surprises on the high side. Create your live VT Markets account and start trading now.

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