The Pound was slightly higher against the US Dollar on Friday, helped by mild weakness in the Dollar. Trade was quiet due to the Good Friday holiday, with focus on the US Nonfarm Payrolls (NFP) report.
GBP/USD traded near 1.3234, after falling to a four-month low of 1.3159 earlier in the week. The US Dollar Index (DXY) was near 100, after reaching a 10-month high of 100.64 on Tuesday.
Markets Steady Ahead Of Key Data
GBP/USD stabilised around 1.3227 after a sharp fall the previous day. Geopolitical tensions and uncertainty over the reopening of the Strait of Hormuz lifted oil prices and supported demand for the Dollar.
The Pound also faced pressure from the UK’s reliance on energy imports and concerns about public finances. UK government bond yields rose alongside energy prices.
GBP/USD held gains after losing over 0.5% the day before, trading around 1.3230 in Asian hours. The daily chart kept a bearish tone, with the pair still inside a descending channel.
The pair remained below the nine-day and 50-day Exponential Moving Averages (EMAs). It also showed lower highs and lower closes from the 1.35 area, with rebounds capped near the nine-day EMA around 1.3250.
Options Strategies In A Bearish Trend
Looking back, we saw a similar setup around this time in 2025, when geopolitical tensions and a rush to the dollar pushed GBP/USD down to multi-month lows. The Pound was vulnerable then due to a heavy reliance on energy imports and worries over public finances. Today, the drivers have shifted, but the pressure on the pair remains a familiar theme for us.
Currently, the focus is less on geopolitics and more on stubborn inflation figures from the UK. The latest data from last month showed core inflation holding at a sticky 2.9%, which complicates the Bank of England’s path forward. While this is an improvement from the highs of previous years, it’s proving difficult to get it back to the 2% target, keeping the BoE from signaling any rate cuts.
Meanwhile, the US dollar continues to find strength from a robust labor market. Today’s Nonfarm Payrolls report showed the US economy added 245,000 jobs in March, beating expectations and reaffirming the Federal Reserve’s patient “higher for longer” stance. With the DXY index now trading firmly above 105, the greenback’s yield advantage over other currencies is significant.
This mirrors the dynamic we observed in 2025, where a strong dollar capped any significant rebound in the pound. Back then, the pair struggled below 1.3300, whereas today we are battling to hold the 1.2450 level. The technical picture also shows a consistent pattern of lower highs, reinforcing this bearish trend over the past year.
For derivative traders, this environment suggests that selling upside volatility in GBP/USD could be a prudent strategy. Selling out-of-the-money call options or establishing call spreads could generate income while the pair remains range-bound or drifts lower. This capitalizes on the view that any rallies will likely be limited due to persistent dollar strength and ongoing UK economic headwinds.
It’s also wise to consider buying short-term put options ahead of key data releases, like the upcoming UK inflation report. These can act as a cheap hedge against a sudden downside move if the data disappoints. Given the pair’s current position near yearly lows, such strategies offer a defined-risk way to profit from a potential break lower.
