The GBPUSD currency pair has paused right before hitting the 38.2% retracement level, showing that buyers are still active. The Bank of England has noted that the economic situation is finely balanced. They mentioned that the yield curve and local factors are playing a role in their decisions about interest rates. After reaching 1.3436, the GBPUSD pulled back some of its gains, falling short of the 50% target of 1.3463. It dropped to a low of 1.3390 near the 38.2% retracement level and is currently trading at 1.3410.

Buyer Activity and Resistance Levels

Staying above the 38.2% retracement level encourages buyers. To gain more control, they need to push prices above the 50% level seen in July. Currently, the GBPUSD is facing a key resistance level. However, the recent rebound keeps buyers engaged. On August 7th, 2025, the Bank of England stated that the situation is delicate. They indicated that while rates are likely to go down eventually, the timing of any cuts is now less certain. This uncertainty is evident in the latest economic reports. July’s inflation showed a stubborn core CPI at 3.1%, well above the 2% target and slightly higher than the previous month. Meanwhile, GDP growth for the second quarter was barely there at just 0.1%, illustrating the tight balance the Bank is trying to maintain.

Technical Levels and Market Strategy

For the time being, the pound staying above the 1.3386 support level keeps buyers in the mix. We are looking to see if this support can help push prices towards the 1.3463 resistance level. To show that buyers are regaining control from sellers, a move above the 50% midpoint is essential. This moment of indecision resembles the unpredictable trading we experienced in late 2023 and early 2024, when the pound struggled to find clear direction as the market adjusted to the end of the aggressive rate-hiking cycle. The current sideways price movement suggests a similar pattern might be developing. For traders in derivatives, the Bank’s uncertain timing hints that buying volatility could be a wise strategy over the next few weeks. This could involve strategies like long straddles, allowing profit from significant price movements in either direction. With domestic factors being primary drivers, any unexpected data on inflation or jobs could lead to a breakout. Traders with a specific directional bias should use these technical levels as clear risk markers. A consistent break below 1.3386 would signal that sellers are taking control, while moving above 1.3463 is needed to confirm the strength of buyers. Until either of these levels is broken, prices are likely to remain stuck in this range. Create your live VT Markets account and start trading now.

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