Insights 
VT 
Pound Sterling (GBP) has reached a peak not seen in over three years, with a latest trade rate marked at 1.3565. This increase follows better-than-expected activity, inflation, and PMI services data.
The GBP’s strength is partially due to recent positive economic data, which indicates strong growth momentum. It is also influenced by reduced uncertainties from a US-UK trade deal and less dovish rhetoric from the Bank of England.
Weaker Usd Trend
Meanwhile, a weaker USD trend has contributed to the upward trajectory of the GBP. The currency’s potential next resistance is anticipated at the 1.3660 and 1.3750 levels, while support remains at 1.3450 and 1.3330.
What we’ve seen here is a currency inching upwards on the back of more than just favourable sentiment. The rally in Sterling, now trading at 1.3565, has come after a string of better-than-expected economic prints—activity levels, inflation trends that hint at persistent domestic demand, and robust figures in the services sector. Taken together, these releases suggest an underlying resilience in the UK economy that may support Sterling in the short to medium term.
With economic figures pointing to ongoing recovery, market participants have scaled back expectations of dovish monetary policy. Bailey’s recent tone, though not overtly hawkish, has been interpreted by markets as an indication that the Bank is not planning to push rates down anytime soon. That shift in expectation has bolstered confidence in GBP-denominated assets, and by extension, the currency.
There’s another tailwind, of course. A broadly weaker dollar has been playing its part. As Treasury yields drift lower and US data begins to come in mixed rather than buoyant, demand for the greenback has eased, leaving it on the back foot across major pairs. This has allowed Sterling to extend its ride higher with less resistance from the other side.
Now, with the 1.3660 and 1.3750 levels marked out as the next potential barriers, traders should take note. Profit-taking is likely to become more pronounced as those lines come into scope, while 1.3450 and 1.3330 remain the nearby areas where demand may stabilise any pullbacks. Risk-reward setups around these zones will require sharper entries than before.
Positioning And Risk
Because positioning is now tilted slightly long, unexpected downside in headline data releases or a renewed push by Powell for higher-for-longer rates could expose some of those stretched levels. Intraweek catalysts—be it from a CPI surprise or a hawkish Fed Minutes—might offer several two-sided opportunities that shouldn’t be ignored.
With volatility compressing across G10 FX, breakout movements may be more abrupt than gradual. It’s the kind of environment where layered entries work better than full-sized exposure all at once. Being nimble matters more here, especially when the moves are being driven not only by domestic data but also a recalibration of global rate expectations.
Communication from the MPC will also carry weight—even if nothing new is said outright, how it’s said will matter. Traders will want to listen carefully for any language around wage growth or service inflation. Both have been sticky, and both tend to influence which way the Bank leans.
In short, when levels like 1.3750 are within reach, and fundamentals support the uptrend only partially, a balanced view is better. Buy too aggressively and you risk chasing a move that has already run far. Wait too long and you might miss opportunities near support. The squeeze continues to build.
