The British Pound has shown some signs of recovery, but it likely won’t exceed the level of 1.3525. Over the long run, analysts from UOB Group predict that the Pound will trade between 1.3400 and 1.3525. In the last 24 hours, there was a hint that it might drop to 1.3400, but a significant break below that seems unlikely. Instead, the Pound rose to 1.3489. However, it probably won’t break above 1.3525. There is resistance at 1.3500 and support around 1.3460 and 1.3435.

Short to Medium Term Trading Range

Looking at the next one to three weeks, the GBP is expected to stay within a trading range. Initially, the forecast included a range of 1.3360 to 1.3525, but experts now suggest a tighter range of 1.3400 to 1.3525. This indicates clearer expectations for the Pound’s movements in the near future. The recent rebound for the Pound appears limited, making a break above 1.3525 unlikely soon. Price changes should stay in a narrower range, mainly between 1.3400 and 1.3525. We anticipate that this range-trading will continue for the upcoming weeks. This forecast implies that derivative traders might benefit from low volatility and an unclear direction. Selling out-of-the-money call options at or slightly above 1.3525 could harness the strong resistance. This strategy could earn income from premiums as long as the Pound does not surge significantly. Conversely, selling put options close to the 1.3400 support level aligns with the belief that buyers will emerge if prices drop. Combining these strategies allows traders to take advantage of the pair remaining within this range. The focus is on betting that prices won’t break out significantly in either direction.

Economic Context and Implications

This outlook is supported by recent economic data. The UK’s inflation rate was reported last week at 2.8%, which is too high for the Bank of England to consider lowering interest rates. However, the latest quarterly GDP figures for 2025 showed growth has stagnated at just 0.1%, ruling out any rate hikes as well. In the US, similar trends are evident, with core inflation steady around 3.1% and job growth slowing down. There’s a parallel to the situation in 2022, when both central banks opted for a “wait and see” approach, leading to reduced currency volatility. This historical context strengthens the belief that the Pound will remain steady for now. Create your live VT Markets account and start trading now.

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