Insights 
VT 
Current Trading Range Expectations
Over the next one to three weeks, the expected trading range for GBP remains between 1.3360 and 1.3525. Although there’s a slight downward trend, it does not indicate a prolonged decline. Therefore, GBP is predicted to persist in the noted range.
The FXStreet Insights Team comprises journalists who curate market observations from respected experts. This team’s content combines notes by commercial analysts and additional insights from both internal and external analysts.
We are seeing a view that GBP/USD is set to trade in a tight range, specifically between 1.3360 and 1.3525, with strong support around 1.3400. With the pound currently trading significantly lower than those levels from a few years ago, this perspective suggests that a period of stability may be ahead. This implies that selling volatility might be a reasonable strategy for the coming weeks.
For traders who agree with this range-bound outlook, selling options premium seems like the move. Strategies like an iron condor, with puts sold below the 1.3360 floor and calls sold above the 1.3525 ceiling, could be profitable. This approach benefits from low volatility and the passage of time as long as the currency pair stays between those lines.
Inflation and Interest Rate Impacts
This view is supported by recent data showing UK inflation has cooled to 2.5% as of September 2025, which is close to the Bank of England’s target. With the US Federal Reserve also seeing inflation moderate to 2.8%, both central banks have likely paused their interest rate hikes. This often leads to reduced currency volatility and more predictable ranges.
However, we must remember what happened after a similar period of stability back in late 2021. Despite expectations for the 1.3400 level to hold, GBP/USD began a steep decline throughout 2022, famously bottoming out near 1.03 during the UK’s mini-budget crisis. This history serves as a stark warning against being too confident that a range will hold indefinitely.
Given that historical breakdown, a more cautious approach could involve buying cheap, far out-of-the-money put options as a hedge. This provides protection against a sudden, sharp drop like the one we saw in 2022. It allows a trader to still collect premium from a range-bound strategy while limiting risk if conditions change suddenly.
