UOB Group analysts project GBP to range between 1.3450 and 1.3590.

    by VT Markets
    /
    Jul 25, 2025
    The British Pound (GBP) might see some more drops, but it probably won’t go below 1.3450, with another support level at 1.3490. In the next few weeks, GBP is expected to move between 1.3450 and 1.3590. Recently, GBP fell from a high of 1.3588 to a low of 1.3504, missing the predicted resistance level of 1.3610. In the short term, GBP may dip a bit more, but it should stay above the key support levels.

    Forecast for British Pound

    Previous forecasts suggested a positive trend for GBP, although it was slower due to overbought conditions. This was confirmed when it dropped to 1.3504 without crossing the support level of 1.3490. Despite this decline, GBP is likely to stabilize between 1.3450 and 1.3590. It’s essential to remember that financial data comes with risks and uncertainties. Make trading decisions based on careful research. You are responsible for any risks, including possible investment losses. This information is for your reference and is not investment advice. Considering the expected movements within a set range, traders should think about strategies that benefit from low volatility. This means selling options contracts with strike prices safely outside the predicted 1.3450 to 1.3590 range. This strategy helps generate income as long as the currency stays within these limits. Recent UK economic data supports this stable outlook. The Consumer Prices Index recently met the Bank of England’s 2.0% target for the first time in almost three years, reducing the likelihood of a quick interest rate change. This economic calm strengthens our view that the pound won’t have a strong reason to break its current range anytime soon.

    Economic Factors Influencing GBP

    This situation is different in the United States, where Federal Reserve officials are cautious about lowering rates too quickly. The different timelines for potential rate changes between the two central banks are likely to keep the currency pair limited. For example, markets see a greater than 60% chance of a Bank of England rate cut by September, which should prevent any significant rises for the pound. A practical way to use this perspective would be to develop a strategy like an iron condor. This involves selling a call option above the 1.3590 resistance and a put option below the 1.3450 support. This strategy directly benefits from the idea that the pound will stay within these boundaries. The premium earned from selling these options acts as a cushion against minor price shifts. Historically, currency pairs often experience low-volatility phases during summer or when central bank policies are clear. Recently, implied volatility for sterling options has been decreasing, as shown by data from derivatives markets, making it more appealing for us to sell premium. This situation rewards traders who expect stability rather than a significant price change. Create your live VT Markets account and start trading now.

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