Current Trading Range Expectations

In the next one to three weeks, GBP is expected to trade between 1.3360 and 1.3525. While there is a slight downward trend, it doesn’t suggest a long-term decline. Thus, GBP is likely to stay within this range. The FXStreet Insights Team includes journalists who gather market thoughts from trusted experts. Their content combines notes from commercial analysts with insights from both internal and external analysts. Currently, GBP/USD seems set to trade in a narrow range, specifically between 1.3360 and 1.3525. There is strong support around the 1.3400 mark. Since the pound is significantly lower than in previous years, stability may be on the horizon. This indicates that selling volatility might be a smart strategy for the upcoming weeks. For traders who support this range-bound view, selling options premium could be a wise move. Strategies like an iron condor, which involves selling puts below 1.3360 and calls above 1.3525, could yield profits. This method thrives on low volatility and the passage of time, as long as the currency pair remains within these limits.

Inflation and Interest Rate Impacts

This outlook is backed by recent data, showing UK inflation has cooled to 2.5% as of September 2025—close to the Bank of England’s target. The US Federal Reserve has also seen inflation decline to 2.8%. As a result, both central banks are likely pausing their interest rate hikes, which tends to reduce currency volatility and create more stable trading ranges. However, we must recall what happened after a similar period of stability in late 2021. Despite the expectation that the 1.3400 level would hold, GBP/USD faced a dramatic decline throughout 2022, hitting a low near 1.03 during the UK’s mini-budget crisis. This history is a strong reminder not to be overly confident about the range holding forever. Given this past experience, a more cautious strategy might involve buying inexpensive, out-of-the-money put options as a hedge. This allows traders to protect against sudden drops like those seen in 2022. It lets them collect premiums from a range-bound strategy while minimizing risk if the situation changes quickly. Create your live VT Markets account and start trading now.

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