Insights 
VT 
The GBP/USD pair has declined towards 1.33, driven by weak employment data in the UK. The UK’s jobless rate rose to 4.8%, with hiring momentum slowing, which could prompt the Bank of England to consider lowering interest rates.
Despite these labour market concerns, there is scepticism about further easing this year, with predictions pointing to a rate cut being possible only in 2026. Meanwhile, the US Dollar remains stable as traders anticipate Federal Reserve Chair Jerome Powell’s speech.
Technical Analysis Outlook
Technical analyses show that GBP/USD might face further pressure, possibly testing lower levels if it closes below 1.3300. Support lies at 1.3200, with resistance at 1.3350 and further at 1.3434.
In the US, small business sentiment dipped in September, affecting the US Dollar. The NFIB Business Optimism Index fell to 98.8, denting positive outlooks after three steady months.
The Pound Sterling is a key global currency affected by the Bank of England’s monetary policies and UK economic data, including GDP and employment figures. A strong Trade Balance supports the currency, while weak data can lead to depreciation.
We see that the recent softness in the UK labor market, with unemployment ticking up to 4.8%, is building a strong case for the Bank of England to lower interest rates. This view is now more credible following last week’s September CPI data, which showed inflation falling to 2.1%, giving policymakers more room to act. As a result, we expect continued downward pressure on the Pound Sterling against the US Dollar.
Investor Positioning Strategy
For those looking to position for this move, buying GBP/USD put options seems like a prudent strategy in the coming weeks. Focusing on strike prices below the current 1.3300 level, such as 1.3250 or the key support at 1.3200, could offer a defined-risk way to capitalize on further weakness. These positions would benefit if upcoming data, like retail sales figures which have been trending down since the summer of 2025, also disappoint expectations.
On the other side of the pair, the US Dollar remains relatively steady, especially after last Friday’s slightly higher-than-expected Producer Price Index reading. With Fed Chair Powell expected to maintain a data-dependent stance in his speech, this divergence between a slowing UK and a more resilient US economy could increase volatility. This environment suggests that option strategies that benefit from price swings, not just direction, could also be worth considering.
We must remember that while the market is currently pricing in the next BoE rate cut for March 2026, this timeline could be brought forward quickly. Looking back at the rapid policy shifts during the 2023 banking turmoil, we know sentiment can change on a dime. Therefore, any further weak UK data in the fourth quarter of 2025 will be watched very closely and could act as a significant catalyst for the pound to break lower.
