Insights 
VT 
Pound Sterling (GBP) has the potential to rebound within a 1.3290 to 1.3390 range, but could still drop to 1.3200. Analysts from UOB Group suggest downward momentum has eased, yet a decline is still possible.
In the 24-hour outlook, GBP fell to 1.3261 before rising sharply to 1.3370 in New York. A further rebound may occur, yet movements will likely stay within the specified range without breaking it.
Potential Decline
In the one-to-three-week view, last Friday saw a sharp decline in GBP driven by increased downward momentum. This has since slowed, but the potential for a decline to 1.3200 remains unless GBP surpasses 1.3410, indicating 1.3200 could be out of reach.
Related market movements include the EUR/USD under pressure near 1.1550 and gold reaching over $4,100. The impact of US-China trade tensions and other global factors influence overall market sentiment and currency fluctuations.
Given today is October 13, 2025, the rebound in the pound sterling appears to be temporary, suggesting we are likely to trade within a 1.3290 to 1.3390 range for the near future. The latest UK inflation data for September 2025 came in at 2.9%, which, while above the Bank of England’s target, has not been enough to spur confident bets on a near-term rate hike. This economic uncertainty supports the view of a contained market.
We see a persistent downward pressure that could still push the pound toward the 1.3200 level over the next few weeks. Preliminary Gross Domestic Product (GDP) figures for the third quarter showed growth of only 0.1%, a sign of a sluggish economy that limits the central bank’s options. This backdrop makes strategies like bear put spreads, perhaps buying a put option at 1.3300 and selling one at 1.3200, an effective way to position for a potential drop while defining risk.
Market Opportunities
For traders who believe the pound will stay stuck, the current market is well-suited for selling volatility. One-month implied volatility for GBP/USD has recently eased to 7.2% from over 8.5% during the September turmoil, making option premiums attractive for sellers. An iron condor strategy, selling a call spread above the 1.3410 resistance and a put spread below the 1.3290 support, could be profitable by collecting premium as time passes.
The key level that would invalidate this cautious-to-bearish stance is 1.3410, which we see as strong resistance. A decisive move above this price would suggest the downward momentum has fully reversed and would likely trigger a rapid unwinding of short positions. Such a break would probably need a significant catalyst, like a major improvement in global risk sentiment or a surprisingly hawkish shift from the Bank of England.
