Insights 
VT 
Pound Sterling (GBP) is expected to fluctuate within a range of 1.3295 to 1.3360. For any prolonged decline, it must close below 1.3295 according to UOB Group’s FX analysts.
The GBP fell to 1.3309 last Thursday. Analysts noted the increased, though limited, downward momentum. They anticipated a test of the 1.3295 level, but sustained decline seemed unlikely. GBP fluctuated between 1.3289 and 1.3385, closing at 1.3318. Current momentum suggests it will continue trading between 1.3295 and 1.3360.
Analysis Of Recent Week
Last week, it was noted that the GBP’s downward momentum had increased slightly. It was expected to edge lower within 1.3310 to 1.3435. By Friday, the momentum increased slightly more, but a fall below 1.3295 is needed for continued decline. The GBP briefly hit 1.3385 before dropping to 1.3289 and closing at 1.3318. Since the resistance level wasn’t clearly breached, analysts maintain their view.
We see that the GBP/USD is likely to trade sideways in the coming weeks. The price action lacks clear direction, suggesting a range between 1.3295 and 1.3360 is probable. This lack of momentum means we shouldn’t expect any major moves without a new catalyst.
This view is supported by recent economic data released this month. The latest UK inflation figures came in at 2.9%, slightly above the Bank of England’s target, but recent comments from officials suggest they are content to hold rates steady for now. In the US, last week’s retail sales data was solid but not strong enough to force the Federal Reserve into a more aggressive stance, keeping the currency pair in this equilibrium.
Trading Strategies And Considerations
For derivative traders, this environment of consolidation suggests implied volatility may be overpriced. We see an opportunity to sell premium as long as the pair remains contained within this defined range. Strategies like short strangles or iron condors could be profitable if the market remains quiet.
Specifically, we could consider selling call options with a strike price above the strong resistance level of 1.3385. At the same time, selling put options with a strike below the key support of 1.3295 would create a position that benefits from the expected sideways movement. This strategy profits from time decay as long as the pair doesn’t make a surprise breakout.
However, we must watch the 1.3295 level very closely. A sustained daily close below this support would signal that the bearish trend is resuming, invalidating the range-bound thesis. In that scenario, we would need to close out our short positions and consider buying puts to capitalize on a potential slide towards the 1.3200 area, a level we haven’t seen since August of 2025.
This period of low volatility reminds us of the conditions we saw back in the second quarter of 2024. That quiet period was followed by a sharp breakout when central bank guidance eventually shifted. Therefore, while we are positioned for a range now, we are also setting alerts for a breach of the key levels.
