The GBPUSD pair remains in a range with considerable movements within it. The USD ended last week on a low note but has reversed this week, recovering most losses. Traders are anticipating US labour market data, specifically focusing on the NFP report. Currently, there is an 89% chance of a rate cut in September, with 55 bps of easing expected by year-end. Strong data may alter these expectations, while soft data could lower the dollar further.
In the UK, the BoE’s recent hawkish stance has been followed by hotter data, with the latest UK CPI exceeding expectations. Mixed but robust Flash PMIs indicate inflationary pressures. Inflation remains a central concern for the BoE, especially as UK long-term yields continue to rise, reflecting market impatience with inflation measures.
Technical Analysis On Gbpusd
On the daily GBPUSD chart, the price retreated to the 1.3368 support, followed by a bounce attempting to rally toward 1.3590 resistance. On the 4-hour chart, a bounce from the support is clearer, while the 1-hour chart suggests the 1.3445 level as a minor resistance. Upcoming US data releases include ISM Manufacturing PMI, Job Openings, US ADP, Jobless Claims, ISM Services PMI, and the NFP report.
We are seeing the GBPUSD pair caught between two opposing central bank narratives, which explains the wide range. The US appears poised for rate cuts while the UK is still battling persistent inflation. This fundamental conflict is pinning the price between the key 1.3368 support and the 1.3590 resistance.
The case for a weaker dollar was just strengthened by the August 2025 Non-Farm Payrolls report, which showed the US added only 160,000 jobs against an expected 185,000. With the unemployment rate ticking up to 4.1%, the market’s pricing of an 89% chance for a Federal Reserve rate cut this month seems justified. This outlook should provide continued support for GBPUSD on any dips.
On the other hand, the pound is being held up by stubborn UK inflation, which is a major concern for the Bank of England. The last CPI reading for July 2025 was a hot 3.1%, well above target, and the August services PMI registered a strong 52.5, indicating ongoing price pressures. This hawkish backdrop for the BoE is what is causing buyers to step in aggressively near the 1.3368 support level.
Trading Strategies And Risk Management
For derivative traders, this sets up an ideal scenario for range-bound strategies over the next few weeks. We believe selling an iron condor, with short strikes just outside the 1.3368-1.3590 range, could be effective. This strategy would profit from time decay as long as upcoming data does not force a major breakout.
However, we must be prepared for a potential breakout driven by this week’s US ISM Services PMI and further commentary from Fed officials. Traders anticipating a sharp move could buy straddles or strangles to profit from a surge in volatility, regardless of the direction. The key is to position before the event, as implied volatility will likely increase heading into the release.
Looking back, the sharp currency swings we saw during the 2022-2023 rate hiking cycle serve as a reminder of how quickly ranges can break. While the current environment seems contained, the conflicting economic data from both the US and UK means this period of relative stability is fragile. Therefore, we should manage risk carefully, as a surprise from either central bank could trigger a significant and rapid move.
