The British pound has continued its upward trend, with GBP/USD reaching multi-day highs around 1.3200 at the start of the trading week. The pair has benefited from a decline in US consumer sentiment, leading to the US Dollar’s depreciation.
The GBP/USD extended its gains for the fifth consecutive day, nearing the 1.3200 level during the Monday session. This movement was influenced by ongoing trade tensions between the United States and China, causing a decrease in confidence in the US Dollar.
Gbp Usd Uptrend Potential
At the start of the week, GBP/USD was trading just below the 1.3100 level during the Asian session. The ongoing weakness of the US Dollar suggests an upward trend potential for the GBP/USD pair in the near term.
The pound has edged higher again, building on last week’s momentum, and began the week pushing towards the 1.3200 handle. A mix of soft sentiment data out of the United States and the broader climate of geopolitical uncertainty helped tilt the balance. Specifically, US consumer morale stalled, missing forecasts, and added further weight on the dollar. That underscored a shift in positioning, which, judging by price action alone, reflects consistent bias for the pound across multiple sessions.
We’ve now seen five days of sustained gains. That suggests a directional bias is taking form and should be re-examined in the short term. Approaching the 1.3200 zone is not just a psychological level—it marks the area where prior resistance date-stamped to earlier May pullbacks could reappear. Awareness of order congestion at this juncture isn’t optional—it should inform strike levels and expiry preferences alike.
Market Reactions And Trends
Market reactions to continued tensions between Washington and Beijing have laced through all major risk assets, and exchange rates are no exception. The dollar, once a safe haven, has switched role—offering less protection under current conditions, given the shifting expectations around Fed policy and inflation stickiness. That weakness opens scope for further GBP buying against the greenback, especially while treasuries continue softening and Fed officials hint at longer holding patterns on rates.
We’re watching how dollar demand performs around key scheduled data later this week. If investor appetite stays muted, the path towards 1.3250 could become less of a stretch. But approaching those levels without defence means reassessing implied vols and adjusting hedges accordingly. In this trend extension phase, gamma will likely remain elevated during intraday swings.
The Asian session on Monday reflected that early enthusiasm. Dollar sellers appeared quick to come in below 1.3100, giving the pound additional support ahead of London’s open. This points to fresh inflows beginning in Asia and flowing through Europe, rather than retreating once the US joins. That could indicate broader asset reallocations are underway. For now, the dollar lacks clear catalysts of its own.
Monitoring options flows has offered some hints. A slight pick-up in front-end call buying on sterling and a rise in put skew on USD crosses mean traders are gradually favouring softer dollar outcomes near term. Translate that into delta adjustments and you get a picture of hedging activity that’s not overly directional, but still title-weighted towards further GBP strength within a measured range.
Protecting gains while taking cues from cross-asset volatility will be key. No single data point this week is expected to pivot momentum alone. Instead, the accumulation of risk-off inflammation across headlines adds to the dollar’s drag. That gives us a window for flexible, rangy plays rather than one-sided commitment.
Pricing seasonality is also in play. Mid-summer moves tend to be less stable, and thinning volumes often exaggerate shifts. That will amplify sensitivity to positioning squeezes. Keeping sizing moderate and responsive should outperform static directional bets in the coming weeks.
