Insights 
VT 
The GBP/USD pair sees an upward trend, trading above the mid-1.3300s. Dovish expectations from the Federal Reserve and stabilisation from the risk-on sentiment have impacted currency demand. The market anticipates BoE maintaining its interest rates, providing support to the British Pound.
A decline in the US Dollar was partially influenced by reduced tariff threats from the US President. There are also anticipations of additional interest rate cuts by the US central bank this year. From a technical angle, Friday’s breakthrough of the 23.6% Fibonacci retracement level suggests the potential for further gains, with the immediate target being the 38.2% Fibo. level.
Fibonacci Levels and Support
On the downside, the 1.3330-1.3325 Fibonacci region offers short-term support. Below 1.3300, prices falling past the 1.3260 level may prolong a downward trend to 1.3200 and possibly further to the 1.3180 region. Meanwhile, the UK Pound struggles to move past these technical levels due to negative oscillators in short-term charts.
Economic indicators significantly affect the Pound Sterling’s movement. GDP, manufacturing and employment data all contribute to its valuation. A positive Trade Balance boosts currency value by increasing demand from foreign buyers, whereas a negative balance weakens it.
As of today, October 13, 2025, we are seeing some buying interest in GBP/USD, but the overall picture is very different from the past. The divergent policy expectations between a cautious Federal Reserve and a more pressured Bank of England are now the main driver. This setup suggests we should be cautious before assuming any long-term bullish strength for the pound.
The Bank of England is facing a tougher situation than the Fed, which is impacting the pound. Recent data showed UK inflation has finally cooled to 2.8%, but economic growth remains sluggish, with the Office for National Statistics reporting the economy grew by only 0.4% in the last year. This is increasing expectations that the BoE may need to cut interest rates in early 2026 to stimulate the economy.
Heading Into Speculative Territory
On the other hand, the US dollar remains supported by a more resilient economy. The US, by contrast, just added a solid 195,000 jobs last month, giving the Federal Reserve room to keep interest rates at current levels for longer. This policy difference is creating downward pressure on the GBP/USD pair, keeping it well below the levels seen in previous years.
We recall periods back in the late 2010s when the pair traded with a positive bias above the mid-1.3300s, a level that now seems like a distant technical ceiling. That fundamental backdrop, driven by different global risks, has clearly shifted over the last few years. For derivative traders, this means strategies must adapt to the new lower trading range and the underlying economic weakness in the UK.
Given this outlook, we believe traders should consider strategies that protect against or profit from a potential drop in GBP/USD. Buying put options with strike prices targeting the 1.2000 psychological level could be a viable strategy in the coming weeks. This approach would benefit if the pound weakens further as the market prices in a BoE rate cut ahead of the Fed.
