Insights 
VT 
Resistance Levels and Trends
There is potential for GBP to test 1.3475, yet further gains appear unlikely without a clear break past this level. Analysts suggest that if GBP surpasses 1.3475, it could rise to 1.3505, potentially testing 1.3530.
The GBP recently reached a high of 1.3455, remaining shy of the major resistance at 1.3475. Earlier predictions anticipated a test of 1.3445, but resistance at 1.3475 was not expected to be reached.
The Pound Sterling is showing notable weakness against the US Dollar, reflecting a theme we’ve seen before. Expectations are building that the Bank of England will need to cut interest rates soon, putting pressure on the currency. As of today, October 17, 2025, GBP/USD is trading around 1.2450, a significant drop from levels seen in previous years.
This dovish sentiment intensified after the latest inflation data for September 2025 was released this week, showing the Consumer Price Index (CPI) fell to 2.1%. While near the BoE’s target, this sharp drop from the 3.5% seen earlier in the year suggests economic activity is cooling faster than anticipated. This mirrors the situation back in late 2023 when similar weak labor data also fueled rate cut bets.
Market Reactions and Expectations
Looking back, price levels like 1.3475 feel like a distant memory, as the pound has struggled to regain ground since the sharp downturns we witnessed in 2022. The market is now pricing in at least one 25-basis-point rate cut from the Bank of England before the second quarter of 2026. This has created a clear downward pressure that is hard to ignore.
For derivative traders, this means implied volatility is on the rise, with the 1-month measure for GBP/USD now at 9.8%, up from 8.2% last month. This environment makes buying put options attractive to bet on further declines toward the 1.2300 support level. Alternatively, a bear put spread could be used to cheapen the trade and define the risk.
On the other side of the pair, the US economy appears more resilient, with recent retail sales data showing a steady consumer. This policy divergence, where the Federal Reserve is expected to hold rates steady while the BoE looks to cut, adds further weight to the pound. We’ve consistently seen that when central bank policies diverge this sharply, the trend has strong momentum.
