Insights 
VT 
The British Pound’s rebound has potential to continue, yet it is unlikely to surpass 1.3525. In the long term, the Pound is anticipated to range-trade within 1.3400 to 1.3525, according to FX analysts from UOB Group.
The 24-hour outlook suggested a potential decline towards 1.3400 but did not foresee a clear break below this point. Instead, the Pound rebounded to 1.3489, but a clear break above 1.3525 seems improbable. Resistance is present at 1.3500, while support is located at levels of 1.3460 and 1.3435.
Short to Medium Term Trading Range
In the one to three weeks perspective, GBP is expected to continue trading within a range. Initially, the forecast was a trading range between 1.3360 and 1.3525. However, experts now believe a narrower range of 1.3400 to 1.3525 will adequately limit price fluctuations. This reflects a narrower focus on Pound fluctuations in the near future.
We see the recent rebound in the Pound as having limited potential, making a clear break above the 1.3525 resistance level unlikely in the near future. Price movements should be contained within a narrower range, likely between 1.3400 and 1.3525. For now, we expect this range-trading environment to persist for the next few weeks.
This outlook suggests that derivative traders should consider strategies that profit from low volatility and a lack of direction. Selling out-of-the-money call options with a strike price at or just above 1.3525 could be an effective way to capitalize on the strong resistance. This position would generate income from the premium as long as the Pound fails to make a significant upward move.
On the other side of the range, selling put options near the 1.3400 support level would align with the view that the pair will find buyers if it dips. Combining these positions allows traders to benefit from the pair remaining within this channel. The key is betting that the price will not break out in either direction.
Economic Context and Implications
This perspective is reinforced by the latest economic releases we’ve seen. The UK’s inflation rate, which was reported last week at 2.8%, remains too persistent for the Bank of England to consider rate cuts. However, with the most recent quarterly GDP figures for 2025 showing growth has stagnated at just 0.1%, any thoughts of a rate hike are also off the table.
In the US, the data tells a similar story of policy paralysis, with core inflation holding steady around 3.1% and job growth moderating. We remember a similar period of range-bound activity back in 2022 when both central banks adopted a “wait and see” approach, causing currency volatility to dry up. That historical context strengthens our belief that the Pound will remain confined for now.
