Insights 
VT 
Market Influences On GBP/USD
The Pound Sterling (GBP) trades cautiously around 1.3315 against the US Dollar (USD) during the European session. The GBP/USD pair remains steady as discussions between US Treasury Secretary and China Vice Premier on easing trade tensions, triggered by China’s export controls on rare earth minerals, are anticipated.
The British Pound forms a bullish Cypher pattern against the USD, with traders focusing on the Demand Zone at 127.2% and 161.8% Fibonacci extensions. This development indicates a possible upward trend in the GBP/USD exchange rate, targeting a level of 1.3609.
In the broader market, the US PMI improved to 54.8 in October, influencing currency movements. Additionally, Bitcoin trades above $111,000, while Ethereum and XRP show modest growth supported by stable retail demand, indicating a positive trend in the cryptocurrency market.
Simultaneously, the US government remains in shutdown, which impacts data availability, yet a Federal Reserve rate cut is widely anticipated. JPMorgan plans to introduce Bitcoin and Ethereum-backed loans for institutional clients by year-end, signifying a shift in banking strategies.
As of October 24, 2025, the Pound is trading with caution against the Dollar, but the underlying technical setup appears bullish. The key event holding the market back is the high-stakes trade talks between the US and China happening today. Traders should watch for any headlines from these negotiations as a positive outcome could spur risk-on sentiment, though the immediate impact on GBP/USD is uncertain.
Strategic Trading Approaches
A bullish Cypher pattern is forming on the charts, suggesting a potential move towards the 1.3609 level. We see institutional interest building in the demand zone identified by Fibonacci extensions. This technical formation provides a clear target for long positions should market sentiment improve.
Fundamentally, the case for a weaker dollar is growing, which would support a higher GBP/USD. Recent U.S. Core CPI data released last week showed a month-over-month increase of just 0.1%, below forecasts and fueling expectations for a Fed rate cut next week. In contrast, the UK’s latest manufacturing PMI, released on October 21, unexpectedly rose to 51.2, showing resilience in the British economy.
This situation reminds us of the market dynamic we observed back in late 2023, when signs of peaking U.S. inflation led to a significant Fed pivot and a subsequent multi-month decline in the dollar index. The current government shutdown in the U.S. only adds to the pressure on the Federal Reserve to adopt a more dovish stance. The lack of economic data from the shutdown is making markets nervous and increasing the odds of a precautionary rate cut.
Given the binary risk of the trade talks, a direct long position is risky. A more prudent approach for derivative traders would be to buy GBP/USD call options with a strike price near 1.3400 and an expiry in late November or early December. This strategy allows traders to capitalize on a potential rally towards the 1.3600 target while capping downside risk to the premium paid.
The broader market confirms this cautious but anti-dollar sentiment, with Gold pushing past $4,100 an ounce and Bitcoin holding firmly above $111,000. These moves indicate a flight to assets that are perceived as stores of value outside of the traditional financial system. This backdrop supports strategies that bet against dollar strength in the coming weeks.
