### GBP/USD One-Month High Currently, GBP/USD is testing its 200-day Simple Moving Average (SMA) at 1.3318. If it breaks above this level, the exchange rate could rise further. On the other hand, if it closes below 1.3300, the pair might continue to trade within the range of 1.3265 to 1.3318. This week, the British Pound showed the strongest performance against the US Dollar among major currencies. In the past, speculation about a new Fed Chair could push GBP/USD above 1.3300. However, as of December 3, 2025, the situation is quite different, with the pair trading lower at approximately 1.2650. Today’s market is driven by solid economic data rather than political rumors. Previously, a weak jobs report showing a loss of 32,000 jobs would have quickly indicated a dovish shift from the Fed. Now, the US economy is in a different stage, with the latest non-farm payroll report for November 2025 showing a steady gain of 155,000 jobs, though the growth is cooling. The current Fed funds rate is at 3.75%. We expect a gradual, data-dependent approach to rate changes in 2026, unlike the previous 85% likelihood of an emergency rate cut. ### Economic Influences Across the Atlantic, the market no longer suggests a 90% chance of a Bank of England (BoE) rate cut. UK inflation remains stubborn, currently reported at 3.1%, significantly above the 2% target. This situation compels the BoE to keep its restrictive stance, maintaining the Bank Rate at 4.25%. For traders in derivatives, strategies should now focus on economic data releases rather than political surprises. Options volatility tends to increase around inflation and employment reports. Thus, it’s wise to set up straddles or strangles before these critical events to capture the anticipated price movements. The high-interest rate environment also makes the cost of carry a more important factor in pricing forward contracts. The technical levels we are monitoring have adjusted to this new reality. Instead of focusing on the 200-day moving average near 1.3318, the key resistance level for GBP/USD is now around 1.2700. Any derivatives positions, especially those with barriers or specific strike prices, need to be adjusted for this lower trading range. Create your live VT Markets account and start trading now.

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