The British Pound is holding steady near one-month and multi-month highs against the US Dollar as downside risk reversals continue to fade, according to Scotiabank strategists Shaun Osborne and Eric Theoret. Sterling is currently consolidating gains with traders eyeing the 1.36 level as the next potential cap on the currency pair’s upward movement.
This consolidation phase reflects reduced pessimism in options markets, where risk reversals had previously signaled bearish sentiment on the Pound. The shift suggests improving confidence in Sterling’s near-term outlook as negative positioning unwinds. Traders and brokers should monitor whether GBP can break through resistance at 1.36, which would mark a significant technical milestone and potentially trigger further upside momentum against the Dollar.
The currency pair’s behavior at current levels will be critical for positioning decisions in the coming sessions as market participants assess whether this strength can be sustained amid ongoing economic data releases.
FXnCO Insight
Watch for a decisive break above 1.36 in GBP/USD as the trigger for extended long positions, while fading downside hedges present tactical opportunities in options markets.
Source: FXStreet