The Pound Sterling (GBP) has been climbing steadily but is hitting a barrier at the 1.3515 mark. Although it rose to 1.3450, surpassing earlier expectations, breaking through 1.3515 remains tough. For the next three weeks, the outlook for GBP is neutral, as it has recently stabilized after previous weaknesses. Analysts point out that GBP is trading within a range of 1.3285 to 1.3425. If momentum continues, there is a chance for more gains. On a broader scale, other assets like EUR/USD and gold are facing pressure due to the rebound of the US Dollar and shifting market sentiments. The policies of the Bank of England and the overall market situation significantly influence trading dynamics. Traders should be cautious and conduct thorough research due to the risks and uncertainties of forex trading. It’s essential to grasp the complexities of the market and consider personal investment goals and experience levels before making financial moves. We see the Pound Sterling pushing against the 1.3515 resistance level but believe it will struggle to break through soon. The latest UK inflation report for July 2025 showed inflation at 2.8%, which supports a steady policy from the Bank of England and limits chances for a major breakout. This indicates that the pound will likely stay within its recent trading range for now. With this neutral outlook, we are considering derivative strategies that can profit from low volatility. An iron condor, with strike prices well outside the 1.3285 and 1.3515 limits, seems to be a wise strategy for the coming weeks. This allows us to benefit through time as long as the pound stays within this expected channel. Reflecting back, we recall the wild swings of the pound during the fiscal turmoil of late 2022, which brought high volatility. The market is calmer now, with implied volatility on GBP options near 18-month lows, according to CME Group data. This calmer environment supports our belief that selling volatility is a safer strategy than buying it. We also need to keep an eye on the US dollar, which has been gaining strength after the recent US jobs report showed approximately 205,000 jobs were added in July 2025, exceeding expectations. This dollar strength sets a ceiling for GBP/USD, making it harder for the pound to cross 1.3515. Any unexpected hawkish statements from the Federal Reserve could add further pressure. Thus, our plan is to stay cautious and flexible in the coming weeks. We will monitor upcoming data closely, especially the UK’s preliminary Q2 GDP figures, for any signs of economic weakness that could push the pound to the lower end of its range. Carefully managing our positions is crucial, as the market can shift quickly with new information.

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