GBP/USD fell to 1.3448 in the New York session, then bounced and ended at 1.3467. Downward momentum remains modest, with a possible dip to 1.3440 and a break below that level not ruled out.
In the 24-hour view, the pair had been expected to trade between 1.3475 and 1.3530, but dropped below that band late in the day. Resistance is at 1.3480, and a move above 1.3510 would suggest it is not heading for 1.3440.
Near Term Technical Picture
For the 1–3 week view, the pair had been seen trading in a 1.3400 to 1.3600 range, with previous upward momentum fading. Although the rise in downward momentum is limited, the chance of a test of 1.3400 is increasing.
This probability is expected to keep rising unless 1.3530, described as strong resistance, is broken. The article notes it was produced with the help of an AI tool and reviewed by an editor.
We see the probability of GBP/USD testing the 1.3400 level increasing over the next few weeks. This suggests traders should consider strategies that benefit from a falling market. The key level to watch on the upside is the strong resistance at 1.3530, which should cap any rallies for this bearish view to hold.
This outlook is supported by recent economic data showing a divergence between the UK and US. The latest figures from this month show UK inflation, while easing, remains sticky at 3.1%, causing the Bank of England to maintain a cautious stance. In contrast, the US labor market continues to show strength, with the last Non-Farm Payroll report adding a robust 255,000 jobs.
This policy divergence is putting downward pressure on the pound. The Federal Reserve’s commitment to holding rates higher for longer contrasts with market speculation about a potential rate cut from the Bank of England later this year. This interest rate differential makes holding US dollars more attractive than sterling.
Options Strategy Considerations
For derivative traders, this outlook suggests buying put options with strike prices around or below 1.3400 could be a viable strategy. Alternatively, selling call credit spreads with the short strike placed above the 1.3530 resistance offers a way to collect premium if the pair trades sideways or down. Implied volatility remains moderate, making these strategies reasonably priced.
We saw a similar pattern when looking back at late 2025, where the pair struggled to overcome resistance near the 1.3600 mark. That rally failed due to persistent concerns over the UK’s growth outlook at the time. This historical price action reinforces our conviction in the strength of the current resistance around 1.3530.
While our bias is turning bearish, we note that downward momentum is not yet strong. A decisive break above 1.3530 would invalidate this view and signal that the immediate downward pressure has faded. Therefore, any short positions should have clear risk parameters tied to that level.
