The GBP/USD pair is trading around 1.3370-1.3365, staying steady as we approach important economic reports and events. Traders are looking forward to UK employment data, the US Nonfarm Payrolls report, UK inflation numbers, and the Bank of England’s policy decision later this week. Market analysts expect that the Bank of England may lower borrowing costs, and a dovish Federal Reserve chair could help the pair maintain support at the crucial 200-day Simple Moving Average. Currently, the global mood favors the safety of the US Dollar, but its rise is limited by anticipated rate cuts from the Federal Reserve.

UK Claimant Count Change

The UK Claimant Count Change data provides valuable insights into the labor market. If the claimant count rises, it indicates economic troubles and may weaken the GBP. On the flip side, if the count decreases, it can signal improvement and strengthen the Pound. This measure is timely for gauging economic health and can greatly influence GBP volatility. It’s important to remember that the views shared here are by the contributors and may not reflect the official stance of FXStreet. The platform and the author are not liable for any inaccuracies or omissions and do not offer investment advice. Currently, the GBP/USD pair is trading in a tight range around 1.2250, showing little activity ahead of major economic news. This familiar price action reminds us of previous periods of consolidation before important central bank decisions. Traders seem to be hesitant, waiting for a clear direction before making commitments.

Bank of England’s Upcoming Meeting

All eyes are on the Bank of England’s policy meeting scheduled for Thursday. Recent data revealed that the UK Claimant Count for November increased by 15,200, more than expected, while inflation cooled to 2.3%. This reinforces the belief that the BoE may hint at future rate cuts to give support to a slow economy, limiting any significant strength in the Pound for the time being. We recall a similar situation when the 1.3350 level, supported by the 200-day moving average, was a key focus before central bank announcements. Like those times, the pair now seems poised for a sharp move once the economic picture becomes clearer, with the key support level being the psychological mark of 1.2200. Meanwhile, the US Dollar is also facing pressure. The new Federal Reserve leadership, which took over in mid-2025, is expected to pursue more aggressive rate cuts in 2026 to boost growth, even though core inflation is still around 2.8%. This expectation is limiting the Dollar’s strength and providing a safety net for the GBP/USD pair. With the market in this tight range and important news on the horizon, traders might consider using options to prepare for a potential volatility breakout. A strategy like buying a straddle—purchasing both a call and put option with the same strike price near 1.2250—could be effective. This approach would profit from significant price movements in either direction following the Bank of England’s announcement. For those believing the central bank news may not trigger a large movement, monitoring volatility indexes is essential. The Cboe Sterling VIX (GVZ) is currently at moderate low levels, indicating the market isn’t expecting dramatic changes. Selling options to capture premium might be an appealing yet higher-risk strategy for those anticipating a range-bound situation. Create your live VT Markets account and start trading now.

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