GBP/USD reversed after nearing 1.3600 and then fell back, with the day’s move expected to stay within 1.3495 to 1.3555. The earlier projected range of 1.3545 to 1.3600 held, with a high of 1.3595 and a low of 1.3518.
Downward momentum has picked up slightly but is not strong enough to point to a steady fall. Any further dip is expected to remain part of the 1.3495 to 1.3555 band, with a clear break below 1.3495 seen as unlikely.
Over the next 1 to 3 weeks, upward momentum is described as fading and the chance of more Pound gains is reduced. A move below 1.3480 would indicate the prior rise has stalled.
The report notes the article was produced using an AI tool and checked by an editor.
It appears the strong upward move in the Pound against the Dollar is losing steam after it nearly touched the 1.3600 mark. We are seeing a sharp pullback, suggesting the pair is now likely to trade sideways. For the immediate future, any further declines should find a floor around the 1.3495 level.
Given the expectation of a range-bound market between 1.3495 and 1.3555, selling options could be a prudent strategy. We could look at selling short-dated strangles, with call strikes above 1.3600 and put strikes below 1.3480. This approach profits from the passage of time and reduced volatility as long as the pair remains within this wider channel.
This outlook is supported by recent economic data released in April 2026, which showed UK inflation dipping to 2.8%, slightly below forecasts and lessening the urgency for the Bank of England to act. Meanwhile, strong US job numbers last week continue to support the Dollar, creating a headwind for the Pound. This environment is very different from the clear, inflation-driven trends we traded back in 2024.
The critical level to watch over the next one to three weeks is 1.3480. A decisive break below this point would signal that the recent upward advance has ended and a new downward trend may be starting. If that happens, we should be prepared to close our range-bound trades and consider buying put options to position for further Sterling weakness.
