Insights 
VT 
The Influence Of The Pound Sterling
The GBP/USD pair shows momentum on Thursday, recovering beyond 1.3400, as the US Dollar weakens. However, technical indicators suggest the possibility of fresh sellers at higher levels, needing a break past the 1.3465-1.3475 range for bullish control.
Recently, GBP/USD has struggled to stay above the 100-period Simple Moving Average, indicating potential for bearish trends. Negative oscillators imply that upward movements might be short-lived, pending a sustained increase above critical resistance for further gains.
Should buying continue beyond 1.3500, the pair might surpass the 1.3525-1.3530 supply zone, targeting the 1.3575-1.3580 area. Conversely, the 1.3370 level could act as support, while a drop below could retest the 1.3330-1.3325 zone, inviting stronger bearish pressure.
The Pound Sterling, as the UK’s official currency and fourth most traded worldwide, is influenced by the Bank of England’s monetary policy. The BoE manages inflation with interest rates, affecting GBP’s attractiveness. Economic indicators like GDP and trade balance also impact GBP’s value, with strong data boosting and weak data likely decreasing its value.
Trading Strategies For GBP/USD
We are seeing some positive movement in GBP/USD, with the pair climbing back over the 1.3400 level. This recent strength seems driven by a weaker US dollar, especially after the latest US non-farm payrolls report for September 2025 came in below forecasts, showing a gain of only 150,000 jobs. This has led many to believe the Federal Reserve may be finished with its rate-hiking cycle.
Despite this bounce, the technical picture suggests we are not out of the woods yet. The pair remains within a downward channel that has been in place since early September 2025, and any move higher could face significant selling pressure near the 1.3465-1.3475 resistance area. This cautious outlook is supported by recent UK economic data, where the September Services PMI dipped to 49.5, signaling a slight economic contraction.
For traders who expect this rally to fail, buying put options could be a prudent strategy. A move below the channel support at 1.3370 would be the first trigger, potentially opening the way for a slide toward the 1.3300 mark. We could consider looking at puts with a strike price around 1.3300 or 1.3250, with an expiration in late October or November 2025, to capitalize on this potential downward move.
On the other hand, if we see a sustained break above the 1.3475 resistance level, it would signal a potential change in trend. In this scenario, traders might consider buying call options to target a move toward the 1.3525 supply zone. A bull call spread could also be used here to reduce the upfront cost while betting on a moderate rise in the currency pair.
Ultimately, the next major moves will likely be dictated by central bank policy expectations. Looking back at the aggressive rate hikes we saw globally through 2023 and 2024, markets are now highly sensitive to any signs of a pivot. With UK inflation recently easing slightly to 3.1%, the Bank of England may be hesitant to deliver another rate hike, which could limit the pound’s strength in the medium term.
