The Pound Sterling is trading above 1.3300 against the US Dollar during Tuesday’s European session. The GBP/USD pair is moving sideways as traders await the Federal Reserve’s monetary policy announcement on Wednesday. The Pound could swing between 1.3290 and 1.3350. If it drops below 1.3265, it may indicate the end of its recent upward trend that started late last month, according to analysts.

Forex Market Insights

The GBP/USD pair attracted buyers after a recent lack of direction, staying steady above 1.3300 during the Asian session on Tuesday. There isn’t strong buying momentum as traders hold off ahead of this week’s central bank announcements. The article also mentioned insights from Forex newsletters, but these did not significantly impact the currency pair. The disclaimer notes that the views expressed are those of the authors and that they do not have financial ties to the article. Investing in foreign exchange markets involves risks, including the potential for significant financial loss. Currently, the Pound is trading quietly against the Dollar as we look forward to the Federal Reserve’s monetary policy decision. With the spot price around 1.2450, the market shows little confidence ahead of the announcement. This sideways movement is common before major central bank news.

Potential Breakout Moves

A drop below the 1.2380 support level might indicate the end of the Pound’s recent stability. This could occur if the upcoming UK GDP data shows another period of slow growth, following the mere 0.1% expansion we saw in the third quarter of 2025. Traders should keep a close eye on this level as it may trigger new short positions. In light of this uncertainty, buying put options with a strike price around 1.2350 offers a way to manage risks if a downturn occurs. Alternatively, for those expecting the range to hold, selling out-of-the-money strangles could help capture premiums from the anticipated post-Fed drop in volatility. It’s important to have a position before the central bank speaks. We recall a similar situation in late 2022 when the market stalled ahead of a key Bank of England meeting. Once a hawkish interest rate decision was announced, GBP/USD fell nearly 200 pips in a single session. This history highlights how quickly the current calm can disappear, rewarding traders who are ready for a breakout. Create your live VT Markets account and start trading now.

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