The Pound Sterling (GBP) is steady against the US Dollar (USD) at around 1.3380 during North American trading, having reached a peak of 1.3413. Strong US economic data this week has limited the Pound’s earlier gains, moving it away from the 200-day Simple Moving Average (SMA) at 1.3405. On Friday, the GBP recovered some losses against the USD, rising above 1.3400 before the US market opened. This is an improvement from Thursday’s low of 1.3360. The currency pair is likely to finish the week with little movement after a 0.7% drop over the last two weeks.

The Pound Versus The Dollar

The Pound is still struggling against the strong USD, trading near its four-week low of 1.3360 during European trading. The USD’s strength comes from expectations that the Federal Reserve may pause its easing policies in the next meeting. FXStreet shares market insights but emphasizes that these forecasts involve risks. All information provided is for informational purposes only and does not encourage buying or selling assets. Market participants should conduct their own research. FXStreet and its authors are not responsible for any errors or damages resulting from this information. Market focus remains on the strong US Dollar, fueled by expectations that the Federal Reserve will stop its easing program. We saw strong job growth figures at the end of 2025, with non-farm payrolls consistently exceeding expectations, reinforcing this outlook. This makes betting against the dollar risky in the short term.

Technical Analysis On GBP USD

For GBP/USD, the pair is having difficulty staying above the key resistance level of 1.3400. The weak UK economic performance in the latter half of 2025, including stagnant GDP growth, stands in stark contrast to the strong US economy. This divergence suggests that buying put options on the Pound Sterling could be a wise move to anticipate further weakness. The strength of the dollar is also affecting other assets, as shown by gold’s recent decline from nearly $4,600. Likewise, the EUR/USD pair has slipped towards 1.1600, reflecting the same concerns about the Fed’s potential policies. Traders should pay attention to upcoming US PCE inflation data, as a high reading could confirm the Fed’s pause in adjustments. With the Federal Reserve’s meeting approaching, we can expect increased volatility. Options traders might consider strategies like long straddles on major pairs to prepare for sharp movements in either direction. The pricing of short-term options indicates that the market is anticipating a significant announcement from the central bank. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now