Pound Sterling (GBP) is expected to stay between 1.3030 and 1.3090 due to slowing downward movement. While the longer-term outlook remains negative, further drops may be limited, with 1.2960 being the next key level to monitor, according to analysts at UOB Group. Recently, GBP fell to 1.3012. Although it might drop below 1.3000, it’s unlikely to reach 1.2960 because it is currently oversold. Instead, GBP has been trading between 1.3011 and 1.3055, indicating it will likely continue this pattern.

Short Term Outlook

In the next one to three weeks, the outlook for GBP is still negative, but declines may be limited. If GBP rises above 1.3120, it could signal an end to the weakness seen over the past two weeks. The FXStreet Insights Team gathers insights from various experts, offering a range of market views without presenting a single opinion. The slowing downward momentum shows that the Pound is entering a consolidation phase. For derivative traders, this means they can focus on strategies that benefit from price stability between 1.3030 and 1.3090. Selling out-of-the-money puts and calls in an iron condor could be a smart way to take advantage of this expected stability.

Economic Factors and Trading Strategies

This stability is supported by mixed economic data. Recent UK inflation for October 2025 remains high at 3.4%, well above the Bank of England’s target. This makes it hard for the BoE to signal rate cuts and supports the Pound. However, stagnant Q3 GDP growth at just 0.1% limits significant price increases. In contrast, the US has seen inflation drop to 2.9%, raising speculation that the Federal Reserve may start easing its policies in early 2026. Although we expect the GBP to stay within a certain range in the near term, our long-term outlook is cautiously negative, with 1.2960 as the next major support level. If GBP breaks below the recent low of 1.3011, it may be a good time to buy put options or set up bearish spreads targeting that 1.2960 level. This gradual decline is different from the sharp drops seen during market upheaval in 2022. On the upside, traders with short positions should be aware of the strong resistance at 1.3120. A clear break above this level would indicate that the bearish trend of the last two weeks is over. It’s wise to set stop-loss orders just above 1.3120 to guard against sudden market changes. Create your live VT Markets account and start trading now.

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