## Pound Sterling Bearish Strategies The Pound Sterling (GBP) might drop to 1.3385 before bouncing back. However, it’s unlikely to reach the key support level of 1.3325. In the short term, there’s a slight increase in downward momentum, suggesting that GBP could indeed fall to 1.3385 before recovering. Current resistance levels are at 1.3445 and then 1.3465. In recent weeks, GBP was expected to remain in a range. Yesterday, it unexpectedly hit a low of 1.3394. This drop has increased downward momentum, but it’s unclear if GBP can reach the previous low near 1.3325. If GBP goes above 1.3485, it may indicate that the downward trend is weakening. Since there’s a chance of a drop towards 1.3385, we are considering short-term bearish strategies. Buying put options with strike prices near 1.3400 could be a straightforward way to position for this drop. Focus on short-dated options that expire within the next couple of weeks to take advantage of this expected dip. This downward pressure on the Pound is supported by recent economic data. The UK’s September inflation report revealed a stubborn CPI at 3.1%, preventing the Bank of England from hinting at any rate cuts soon. This contrasts with a stable US economy, where the last non-farm payrolls report showed an impressive addition of 195,000 jobs. ### Bearish Strategies and Risk Management The expectation that the strong support at 1.3325 will hold suggests a more cautious approach. A bear put spread—buying a 1.3400 put and selling a 1.3350 put—can help profit from a slight decline while managing risk. Selling out-of-the-money call options above the 1.3485 resistance level is another viable strategy to earn premium while the downward trend continues. Currently, we’re not seeing the panic that struck during the Sterling crisis of late 2022, which caused wild and unpredictable swings in the currency. The current momentum is more stable and influenced by interest rate differences. This environment supports strategies aimed at profiting from gradual declines rather than extreme volatility. Create your live VT Markets account and start trading now.

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