**Pound Sterling Forecast Update** Last week, GBP faced some challenges. After briefly rising to 1.3390, the downward trend has slowed. For now, GBP is expected to trade between 1.3320 and 1.3475. The FXStreet Insights Team consists of journalists gathering market opinions from experts. The content includes insights from both internal and external analysts. This information is for informational purposes only and isn’t advice. Please do your own research before making financial decisions. FXStreet does not guarantee the accuracy of the information and isn’t responsible for any errors or losses from its use. After breaking above previous resistance, the downward momentum for the pound has lessened. We now anticipate GBP/USD to remain within a set range for the coming weeks, likely between 1.3320 and 1.3475. **Market Strategies and Observations** This outlook is backed by recent economic data and central bank policies. The Bank of England has kept its main interest rate at 5.25% for over a year due to ongoing inflation, which was 3.1% in September 2025. This policy supports the pound, but with the UK’s GDP growth for Q3 2025 at a slow 0.1%, there isn’t much potential for a big rally. For traders using derivatives, the current environment suggests that options might be expecting more movement than is likely. Strategies like selling volatility with short strangles, placing strikes above 1.3475 and below 1.3320, could be effective. This approach allows traders to profit from time decay as long as the pound remains within this expected range. Another viable strategy is the iron condor, which defines risk and reward clearly. The Cboe Sterling Volatility Index (BPVIX) recently dropped to 8.1, indicating low expectations for large price swings and supporting trades that benefit from market stability. This calm level hasn’t been seen consistently since early 2022. The US dollar’s influence is also contributing to the sideways movement. The Federal Reserve is indicating a continued pause on rates, especially after the latest Non-Farm Payrolls report for September 2025 showed slower job growth. This diminishes a key factor boosting the dollar, helping to keep GBP/USD stable. To maintain a slight upward trend within the range, the pound needs to stay above 1.3360. This level now serves as important minor support. If it falls below this point, it may signal that the period of range-trading could end sooner than expected. Create your live VT Markets account and start trading now.

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