Insights 
VT 
The GBPUSD pair is presently rangebound as traders anticipate upcoming US labour market data. The market is focused on the Non-Farm Payroll report, which will heavily influence interest rate expectations. Currently, there is an 89% probability of a rate cut in September, with a total of 55 basis points of easing expected by year’s end. Strong data may reduce the likelihood of a September cut, while weak data may increase expectations of dovish policy and impact the dollar.
In the UK, the Bank of England delivered a hawkish cut, and data shows persistent inflationary pressures. The latest UK CPI was stronger than expected, and although recent Flash PMIs were mixed, they indicated continued economic strength. The central bank remains focused on reducing inflation to 2%, despite potential labour market weaknesses. Core inflation has consistently remained above 3% since 2021.
Technical Analysis
On the daily chart, GBPUSD is trading between 1.3590 resistance and 1.3368 support, with anticipation of sellers approaching the resistance level. The 4-hour chart shows a recent break above a minor trendline, suggesting buyer activity targeting the resistance. On the 1-hour chart, buyers recently entered at a swing low of 1.3486, which may act as minor support. Upcoming catalysts include US Jobless Claims and the US PCE price index.
As of today, August 28th, 2025, we see the GBP/USD pair is caught between a key resistance at 1.3590 and support at 1.3368. The market is quiet as it awaits critical U.S. labor market data next week. This upcoming data will be the main driver of movement.
The focus is squarely on the Federal Reserve, with markets pricing in an 89% chance of a rate cut in September. Today’s weekly jobless claims report showed a figure of 235,000, slightly higher than anticipated, which supports the idea of a cooling labor market and reinforces expectations for a rate cut. This keeps pressure on the U.S. dollar for now.
Given the high uncertainty surrounding next week’s Non-Farm Payrolls report, one strategy is to buy GBP/USD option straddles. A strong report, perhaps over 250,000 jobs like we saw in early 2024, would challenge the rate cut narrative and could push the pair towards the 1.3368 support. A weak number below 150,000 would almost guarantee a cut and likely send the pair breaking through the 1.3590 resistance.
Bank of England Challenges
On the other side of the pair, the Bank of England is facing its own challenges with persistent inflation. The most recent UK CPI data for July 2025 surprised everyone by coming in at 3.5%, when a fall was expected. We know from history that UK core inflation has been stubbornly above 3% since 2021, making the central bank’s job very difficult.
This policy divergence, with the Fed poised to cut rates while the BoE is forced to remain cautious due to high inflation, provides a supportive backdrop for the pound. Traders who believe this trend will continue could consider selling out-of-the-money put options on GBP/USD with expirations in the coming months. This strategy collects premium based on the view that the strong support at 1.3368 is unlikely to break.
For those with a lower risk tolerance, the current range offers clear opportunities. As the price approaches the 1.3590 resistance level before next week’s data, selling call options with a strike price just above it could be a prudent move. This capitalizes on the expectation that the pair will remain contained until a major catalyst forces a breakout.
