The Pound Sterling (GBP) is gradually rising, building on last week’s gains as it approaches the North American trading session. Analysts believe this growth is supported by improved yield spreads, with the market anticipating a rate cut by the Bank of England in December and a slight increase in rates recently. However, some short-term risks are posed by upcoming economic data releases, such as employment statistics and GDP figures. Despite these risks, confidence in the UK’s economic management remains strong. Technical indicators suggest the GBP is recovering from being oversold, indicating potential for further gains with minimal resistance in the 1.3300 to 1.3350 range.

Market Movement and Sentiment

The GBP/USD pair has climbed to two-week highs near 1.3200, driven by better risk sentiment and optimism about ending the US government shutdown. Gold prices have also risen above $4,100 per troy ounce, reaching multi-week highs as the US Dollar faces pressure. The cryptocurrency market, including Bitcoin, Ethereum, and Ripple, is showing signs of a comeback due to improved market sentiment. Meanwhile, discussions on AI’s effect on jobs continue, with debates about potential market bubbles. The British Pound is extending its recovery with support from a slight increase in UK government bond yield spreads. The market largely anticipates a Bank of England rate cut next month, with current overnight index swaps suggesting an 85% chance of this happening. This lowers the risk of a sharp decline if the Bank takes action in December. This week’s focus is on key economic data. We’ll be closely monitoring Tuesday’s employment report, especially after the Office for National Statistics revealed in October 2025 that wage growth has been slowing, despite an unemployment rate of 4.2%. Thursday’s Q3 GDP figures are also critical, with the economy having only grown by 0.2% in Q2 this year.

Technical Analysis and Trading Strategy

Technically, the recovery from a sub-30 RSI reading indicates that recent selling pressure has lessened. The GBP/USD pair found strong support just above the 1.3000 level in late October 2025, which can now be seen as an important floor. For derivative traders, this bounce suggests potential for further gains in the coming weeks. The current risk favors buying call options or establishing bullish positions in anticipation of a price increase. We see limited technical resistance until the 1.3300 to 1.3350 range, which acted as a congestion zone earlier this autumn. This area represents a logical near-term price objective for any bullish strategies implemented now. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now