**Pound Sterling May Decline Further** Recently, the GBP traded at a high of around 1.3370 but then unexpectedly fell to a low of 1.3248. While this drop seems steep, it might test the 1.3240 level again. There is a chance for the GBP to decrease further, but the next support level at 1.3210 is not likely to be reached just yet. In the coming weeks, the expected decline hasn’t happened because the GBP did not close below the previous level of 1.3295. The decline to 1.3248 has created some downward momentum, suggesting the GBP could drop more, with resistance now noted at 1.3340. FXStreet provides insights from various market experts, sharing observations and analysis. Recent articles predict central bank interest rate changes and their effects. FXStreet stresses the importance of doing personal research before making financial decisions, highlighting the risks of market investments. They do not guarantee the accuracy or timeliness of the information. **Recent Economic Developments** The British Pound is facing renewed downward pressure against the US Dollar, with a possible decline to 1.3210 in the coming weeks. The recent drop was unexpected and indicates that the trend is now leaning lower. This new momentum clearly signals that any past stability in the GBP/USD pair has likely ended. This bearish outlook for the GBP is supported by economic fundamentals, as the UK entered a technical recession in the third quarter of 2025. The Office for National Statistics reported a contraction of 0.2%, following a 0.1% decline in the previous quarter. This has raised market expectations that the Bank of England will need to cut interest rates significantly to support the economy. While the Federal Reserve is also preparing to cut rates due to a slowing US labor market, which saw only 95,000 jobs added last month, the dollar remains stronger. The situation in the UK appears worse, making the Pound less appealing. The market seems to be racing towards a decline, with the Pound currently leading. Traders in derivatives should think about strategies that profit from this expected decline. Purchasing put options on GBP/USD with a strike price near 1.3250 offers a clear way to target our 1.3210 goal while managing risk. Given the increasing market volatility, a bear put spread could also effectively reduce the upfront cost of this trade. We should consider 1.3340 as our key resistance level. If the GBP breaks above this price, it could signal that downward pressure is easing and our bearish prediction may be incorrect. Unlike the sharp, panic-driven drop seen in late 2022, this current decline feels more organized and is influenced by differing outlooks from central banks. Create your live VT Markets account and start trading now.

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