The GBP\/USD pair is struggling to maintain gains beyond the 1.3700 level for the second consecutive day. Despite edging lower, it has managed to stay above the mid-1.3600s, with a lack of selling potentially preventing a steep decline from its four-month peak.<\/p>\n
The US Dollar saw a slight recovery from its lowest level since September 2025. This movement posed a headwind for the GBP\/USD pair, as traders began repositioning before the US Federal Reserve’s policy announcement. Expectations are for stable rates at the conclusion of their meeting.<\/p>\n
The GBP\/USD pair experienced gains, reaching above the four-month high of 1.3650, the highest since September 17. This follows a four-day ascent that started near the 200-day simple moving average at 1.3400.<\/p>\n
The pair remains positive, trading above a long-term ascending trendline and an increasing MACD value above zero. Despite high momentum indicated by the expanding Bollinger bands, the RSI flatlining near the 70 overbought level suggests potential sideways movement. <\/p>\n
In other markets, the EUR\/USD remains strong above 1.1900, while gold maintains its bid near $5,100 per troy ounce. Bitcoin is stabilising near $88,000 after a recent rise, and Axie Infinity\u2019s token, AXS, sees a 3% increase, following a surge spurred by its new app token announcement.<\/p>\n
We are seeing the pound struggle at the 1.3700 level against the dollar, a key resistance point it has failed to break for two days now. While the momentum that brought us to this four-month high is strong, technical indicators suggest the rally might be overextended. Traders should be cautious about expecting an easy push higher from here.<\/p>\n
This price action is less about the pound’s strength and more about the dollar’s weakness, which has pushed the greenback to its lowest point since September 2025. Markets are positioning for the Federal Reserve to hold interest rates steady at its meeting tomorrow, especially after the last CPI report for December 2025 showed core inflation cooling to 2.9%. This data supports the view that the Fed’s rate-hiking cycle is finished, putting sustained pressure on the dollar.<\/p>\n
For derivative traders, this creates an opportunity around the upcoming Fed announcement. A bull call spread on GBP\/USD could be considered, allowing one to profit from a potential breakout above 1.3700 while limiting the upfront cost. This strategy benefits from a move higher but also protects against the premium decay that would occur if the price stays flat after the meeting.<\/p>\n
Implied volatility is likely elevated ahead of the central bank decision, making options more expensive. This high volatility could make selling cash-secured puts below the recent support level near 1.3600 an attractive strategy for collecting premium. This approach is for those who believe any dip will be shallow and the pair will remain above this floor in the coming weeks.<\/p>\n
This environment feels familiar, as we saw the dollar index fall over 4.5% in the final quarter of 2025 when markets began pricing in a peak in interest rates. The current strength in assets like gold, which is approaching $5,100, and Bitcoin, trading near $88,000, further confirms this broad-based sentiment against the US dollar. This widespread weakness provides a strong tailwind for the pound, even as it stalls at resistance.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" GBP\/USD holds above mid-1.3600s; bullish trend intact amid Fed policy anticipation and stable dollar recovery.<\/p>\n","protected":false},"author":62,"featured_media":17030,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-40236","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/40236","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=40236"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/40236\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17030"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=40236"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=40236"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=40236"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}