Sterling’s Steady Climb: GBP/USD Rebounds to 1.3446
The pound keeps doing what it has done all year: recovering faster than anyone expects.
GBP/USD closed the week at 1.3446, up from 1.3351, having touched 1.3545 midweek — within touching distance of the June highs. From the late-June low of 1.3143, that’s a 3% rally in three weeks, and it’s happened against a broadly firm dollar. That last part is the impressive bit.
Why sterling keeps winning the relative game
The Bank of England’s inflation fight has left UK rates higher than Europe’s and stickier than America’s — the market’s sweet spot for a carry currency. UK data over the past fortnight hasn’t been stellar, but it hasn’t needed to be. Sterling only has to be less bad than the alternatives, and right now, it is.
EUR/GBP has slipped from 0.8550 to around 0.8490 over the same window — a clean sign that pound strength is idiosyncratic rather than a dollar story in disguise.
The ceiling question
June’s high at 1.3545 is the first test. Beyond that, 1.3600–1.3650 is the supply zone that capped sterling repeatedly through 2025. The pound has a habit of running into that ceiling, recoiling, and consolidating for a month before trying again.
My expectation: a test of 1.3545 next week, a rejection, and a pullback toward 1.3350 that sets up the next attempt. Range trading at its finest. If you’re long from lower, trail your stop and let the market pay you. If you’re flat, wait for the pullback — buying the top of a range is how accounts die by a thousand cuts.
Disclaimer: This is market commentary, not investment advice. FX trading carries substantial risk of loss.
Leave a Reply