Insights 
VT 
The Pound Sterling (GBP) shows a slight decrease due to the broader gains of the US Dollar (USD) against most currencies. The final UK Manufacturing PMI for October was revised to 49.7, marking it as the highest in a year, though it remains below the 50 benchmark for the 13th consecutive month.
Despite being lower, the GBP is maintaining its position within last Friday’s range. Analysts suggest a minor bull reversal pattern might be forming, potentially pushing the exchange rate to 1.3200/10 if a short-squeeze occurs above 1.3145/50. Current support for GBP is seen at 1.3100/05.
The Pound’s Range-Bound Behavior
We are seeing the pound holding a tight range near 1.31 against a stronger dollar. The market is hesitating, with clear support at the 1.3100 level and resistance looming around 1.3150. This lack of direction suggests selling options premium could be a viable strategy for the coming weeks.
The latest UK manufacturing PMI data for October 2025, while improving to 49.7, still marks the 13th month of contraction, which caps any real optimism. Furthermore, with UK inflation last reported at 3.9%, the Bank of England is unlikely to provide any stimulus soon. This economic backdrop supports the idea of the pound remaining range-bound for now.
On the other side of the pair, the US economy appears robust, with the recent Non-Farm Payrolls report showing the addition of 215,000 jobs. This strength gives the Federal Reserve more room to maneuver and helps explain the dollar’s recent gains against most currencies. This divergence in economic performance is a key reason the pound is struggling to break higher.
Given this low volatility, traders might consider strategies like selling strangles with strikes placed outside the 1.3100 to 1.3200 range to collect premium. However, we must be cautious of a potential short-squeeze above 1.3150, which could quickly challenge the upper strike of such a position. A more risk-defined approach, like an iron condor, might be more prudent.
Market Calmness In Contrast
The current market calmness is a significant change from the high volatility we experienced back in 2022 and 2023. Implied volatility for GBP/USD options has fallen to multi-year lows, reflecting this period of consolidation. Traders should remember that such low volatility environments can end abruptly, so stop-losses on any positions are critical.
